Japan's Nikkei tracks Wall Street higher, eyes ASML earnings

TOKYO: Japan’s Nikkei share average traded higher on Wednesday, tracking overnight gains on Wall Street, but the advance was checked as investors grew cautious ahead of chip equipment maker ASML’s earnings due later in the day.

The Nikkei was up 0.58% to 68,136 as of 0152 GMT, after rising as much as 1.5% earlier in the session. The broader Topix edged up 0.21% to 4,047.62.

Overnight, the S&P 500 and the Nasdaq advanced as solid results from big banks and a cooler-than-expected inflation report boosted risk appetite amid rising tensions in the Middle East.

The US semiconductor index, a barometer for Japanese chip-related shares, rose 2.54%.

“The US shares were strong overnight, but the market is now cautiously waiting for the outcome of ASML earnings,” said Hitoshi Asaoka, chief strategist at Asset Management One.

The Netherlands-based ASML, the biggest supplier of equipment used to manufacture AI chips, reports quarterly earnings on Wednesday, looking to justify its chunky valuation and demonstrate how it will contend with US moves to block exports to China.

Its peer Tokyo Electron rose 2.67%, and chip-testing equipment maker Advantest was up 3%.

Financial stocks rose, with Mitsubishi UFJ Financial Group and Nomura Holdings gaining 1.5% and 2.87%, respectively.

Shares of system developers fell following a 25% decline of IBM overnight after the company warned second-quarter revenue would fall below estimates.

NEC and Nomura Research fell 5% each, while computer maker Fujitsu was down 4.2%.

Consulting firm BayCurrent fell 5.17%.

SoftBank Group fell 2.74%, weighing most on the Nikkei.

Uniqlo-brand owner Fast Retailing slipped 0.49%.

Of more than 1,500 stocks trading on the Tokyo Stock Exchange’s prime market, 57% rose, 38% fell and 3% traded flat.