Japan’s Nikkei rises 2% after Wall Street’s gains, tech leads charge

TOKYO: Japan’s Nikkei share average rose 2% on Wednesday, with tech stocks leading the charge in a broad-based rally after Wall Street closed higher overnight on increasing prospects of an interest rate cut in December.

The Nikkei was up 2.1% at 49,672.63, as of 0203 GMT, while the broader Topix gained 1.94% to 3,354.74.

Wall Street extended its rally on Tuesday as a spate of economic data appeared to support the case for the US Federal Reserve to implement its third and final rate cut of the year in December, while softness in the tech sector limited the Nasdaq’s gains.

“Expectations of more Fed rate cuts lifted US stocks overnight and that supported gains in the Japanese stock market today,” said Takamasa Ikeda, a senior portfolio manager at GCI Asset Management.

In Japan, heavyweight technology stocks rose.

Technology investor SoftBank Group jumped 7.4% after plunging nearly 20% in the previous two sessions. Chip-testing equipment maker Advantest climbed 2.28% and chip-making equipment maker Tokyo Electron rose 1%.

Uniqlo brand owner Fast Retailing gained 1.2%.

“With foreign investors leaving for the year-end holiday season, the market will start focusing on smaller stocks and that will keep the market supported,” Ikeda said. Banks rose, with Sumitomo Mitsui Financial Group Mitsubishi UFJ Financial Group up 2.92% and 1.28%, respectively.

Hokkaido Electric Power jumped 4% after a report that Hokkaido Governor Naomichi Suzuki intended to allow the restart of a reactor at its Tomari nuclear plant.

The report came after last week’s news that a regional governor had approved a partial restart of the Kashiwazaki-Kariwa nuclear power plant of Tokyo Electric Power Company Holdings (TEPCO), the operator of Fukushima Daiichi power plant that was destroyed by the March 2011 tsunami.

TEPCO shares rose 2.9%.

Kioxia tanked 9.5% after a report that buyout firm Bain Capital planned to offload $2 billion worth of shares in the memory chip maker.

Of the more than 1,600 stocks trading on the Tokyo Stock Exchange’s prime market, 90% rose, 7% fell and 1% traded flat.