TOKYO: Japan’s Nikkei share average edged higher on Thursday buoyed by a weaker yen, as investors bought up stocks after a selloff in the previous session, but struggled to maintain momentum as tech stocks tracked their US peers lower.
The Nikkei added 0.1% to 38,761.02 by the midday break, while the broader Topix climbed 0.5% to 2,720.93.
AI-focused startup investor SoftBank Group, down 1.8%, joined other heavyweight tech stocks’ slide to drag on the overall index.
Tokyo Electron and Advantest fell 2.9% and 1.1%, respectively.
The yen’s slide against the US dollar to its lowest level since July 24 lent support to export shares, including to Toyota Motor and Sony Group, up 1.6% and 1.1%, respectively.
A softer yen tends to boost Japanese exporters’ overseas earnings when repatriated, buoying trader sentiment.
Among other shares, the largest percentage gainer on the index was Mercari, up 7.2%, followed by Kubota, which gained 6.9%. But the upward momentum eased and the Nikkei briefly dipped into negative territory as the market awaited fresh direction.
“My impression is that the upside (for gains on the Nikkei) faces resistance,” said Hiroshi Namioka, chief strategist at T&D Asset Management.
Japan’s Nikkei rises on weak yen and domestic earnings
The so-called “Trump trades” have boosted US shares to record highs, in turn lifting Japanese equities back toward the psychologically significant 40,000-point level last week.
However, the Nikkei has since faltered.
The benchmark index declined for the second straight day on Wednesday as investors booked profit and weighed the potential negative impact on Japan from the incoming Trump administration’s stance on trade and tariffs.
Meanwhile, “there haven’t been any particularly noticeable policies, by which I mean policies that determine the direction of the market, coming out,” Namioka said.
Amid the uncertainty, the Nikkei is likely to hold in the 38,000-40,000 yen range in the medium-term, he added.
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