TOKYO: Japan’s Nikkei share average traded higher on Wednesday as investors bought back stocks after four straight sessions of losses, but caution ahead of US consumer price data capped gains.
The Nikkei added 0.4% to 38,628.61 by the midday break after falling as much as 0.18% earlier in the session.
“The Nikkei traded within an expected range so the gains in the current session does not mean it has regained momentum,” said Takehiko Masuzawa, trading head at Phillip Securities Japan.
Heavyweight Fast Retailing, the operator of Uniqlo clothing stores, climbed 0.9% to give the biggest boost to Nikkei. Robot maker Fanuc jumped 6.15%. Advantest lost 2.76% to weigh the most on the benchmark.
The chip-testing equipment maker, a supplier to Nvidia, have slid 9% so far this week amid news that the US government would further curb artificial intelligence chip and technology exports.
The broader Topix jumped 0.67% to 2,700.64. Financials rose on growing hopes for an interest rate hike at the Bank of Japan’s (BOJ) policy meeting next week.
Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group rose 1.45% and 2.24%, respectively.
BOJ’s Deputy Governor Ryozo Himino on Tuesday said the central bank would debate whether to raise rates at the meeting next week as prospects of sustained wage gains heighten and the US policy outlook becomes clearer in President-elect Donald Trump’s inaugural address.
Japan’s Nikkei rises as tech shares gain
The BOJ will conclude its two-day meeting on Jan. 24. Overnight, the S&P 500 advanced and US Treasury yields fell after data showed producer prices increased modestly last month.
“Rising US yields hurt the Japanese stock market. But if excessive caution for inflation and a possible rate hike in the US eases, the market will regain momentum,” said Shuutarou Yasuda, a market analyst at Tokai Tokyo Intelligence Laboratory.
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