Japan's Nikkei wavers as lower bond yields offset Broadcom hit

TOKYO: Japan’s Nikkei share average struggled for direction on Thursday, as investors weighed lower bond yields and oil prices against a drop in Broadcom shares.

The Nikkei 225 Index was last up 0.21% at 64,461.68 after swinging between gains and losses.

The broader Topix climbed 0.91% to 4,118.68.

Major US stock indexes advanced overnight, but Broadcom shares fell more than 3% in extended trade at one point after the California-based chip and infrastructure software company forecast quarterly revenue below Wall Street estimates.

The Broadcom share moves “could cap gains in semiconductor-related stocks that tend to drive the Nikkei,” Ryotaro Sawada, senior analyst at Tokai Tokyo Intelligence Laboratory, said in a note.

Japanese chip- and AI-related shares were mixed.

Chip-testing equipment maker Advantest fell 0.8% and cable and optical fibre producer Fujikura lost 1.79%, while memory chipmaker Kioxia rose 0.67% and semiconductor equipment maker Tokyo Electron gained 0.81%.

US Treasury yields slipped from multi-year highs overnight, while 30-year Japanese government bond yields dropped as much as 10 basis points on Thursday.

Oil prices edged lower with no signs of fresh strikes in the latest clash between the United States and Iran.

Japan’s energy explorer sector fell 2.57%, making it the worst performer among the Tokyo bourse’s 33 sector sub-indexes.

Among the biggest percentage decliners on the Nikkei were Uniqlo parent Fast Retailing, down 3.58%, and top Japanese oil and gas explorer Inpex, down 3.43%.

Furnishing retailer Nitori Holdings jumped 6.62% and automaker Mitsubishi Motors gained 4.09%, making them the Nikkei’s biggest percentage gainers.

Japan’s finance ministry is set to auction about 600 billion yen ($3.78 billion) of 30-year bonds later in the day.

A weak auction could weigh on technology shares through higher interest rates while supporting bank shares, Sawada said.