Japan’s Nikkei slips amid drag from strong yen; Advantest surges

TOKYO: Japan’s Nikkei share average edged lower on Thursday as a broadly stronger yen weighed on sentiment towards the exporter-heavy index, although a surge in heavily weighted Advantest limited the losses.

Nvidia supplier Advantest vaulted 7.6%, boosting the Nikkei by about 458 index points, after the chip-testing equipment maker raised its annual profit forecast by 21%.

The Nikkei eased by about 30 points, or 0.1%, to 53,329.39. Of its 225 components, 154 fell versus 69 that rose, with two trading flat.

The broader Topix declined 0.3% to 3,523.24.

The yen pulled back a little overnight as traders paused for breath after three days of sharp gains, but yen buying resumed on Thursday.

A stronger Japanese currency reduces offshore revenues.

A less dovish Federal Reserve on Wednesday also weighed on stock market sentiment, and investors were cautious about taking aggressive positions with the earnings season picking up speed in both Japan and the United States, including results from Apple later on Thursday.

“Japan’s stock market is seeing a temporary withdrawal of funds, including profit-taking selling, as investors take a wait-and-see attitude,” said Wataru Akiyama, a strategist at Nomura Securities. “If strong outlooks emerge for AI-related sectors, the Nikkei could rise again, but we haven’t reached that point yet.”

Microsoft’s announcement on Wednesday of record spending on AI stoked investor worries about a delayed payoff for the broader industry’s massive AI investments.

Except Advantest, Japanese tech shares mostly sold off as a result.

Tokyo Electron dropped 4.7% and SoftBank Group lost 2.7%.

Automakers as a group got a bit of respite, rising 1.4% to be the top performer among the Tokyo Stock Exchange’s 33 industry groups, but that followed a 6.7% plunge over the last three sessions.