Japan’s Nikkei rebounds on boost from chip-related stocks

13 Jul 2023

Riyadh - Maaal

Japan’s Nikkei share average posted its biggest jump in nearly two weeks on Thursday, boosted by heavyweight chip-related stocks, Reuters reported.

The Nikkei index ended up 1.49% at 32,419.33, its biggest one-day jump since July 3. The index had hit a one-month low on Wednesday.

The broader Topix gained 0.97% at 2,242.99.

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“Japan in constant currency remains one of the best performing developed county markets, and today again we’re seeing a very strong Thursday as global investors generally take heart from U.S. CPI,” Richard Kaye, portfolio manager, Comgest, told Reuters Global Markets Forum.

Kaye said the indications of inflation normalizing in the U.S. is “great for Japan, which needs a healthy world economy to export to.”

U.S. stocks ended solidly higher overnight, after a report showed inflation subsided further with consumer prices registering their smallest annual increase in more than two years.

“There are many domestic retail investors who want to buy Japanese stocks on dips,” said Shigetoshi Kamada, general manager – research, Tachibana Securities.

After its best first half performance in a decade, Nikkei has had a volatile start to July, falling 2% for the month as investors book profits and the yen strengthens. The index is up 24% for 2023 and remains the best performing stock market in Asia.

“Japan is being rediscovered rather because it has lagged other development markets for so long despite comparable profit growth,” Kaye said.

Chip-related shares surged, with Advantest closing up 4%, while Tokyo Electron gained 2%. Silicon-wafer maker Shin-Etsu Chemical climbed 3.55%.

Uniqlo brand owner Fast Retailing closed up 1.5%. The company reported a 22% jump in its nine-month operating profit and raised its full-year profit forecast after the closing bell.

Sony Group jumped 4.5% after a report said the game and audio equipment maker would boost research and development spending at its gaming unit by about 10% to 300 billion yen ($2.2 billion) this financial year.