Japanese shares end higher on chip gains, earnings outlook

TOKYO: Japanese shares closed higher on Thursday, with the Topix hitting a record high, as chip-related stocks tracked US peers higher and a robust earnings outlook for local firms lifted sentiment.

The Nikkei rose 1.16% to 68,308.59, while the broader Topix rose 0.86% to a record high close of 4,176.04, extending gains to a seventh straight session.

The S&P 500 and the Nasdaq ended higher on Wednesday, lifted by upbeat quarterly results from CoreWeave and other AI infrastructure firms, while mild inflation data reinforced bets that the US Federal Reserve will hold interest rates steady in September.

The PHLX Semiconductor Index advanced about 2.5%.

“When the SOX index rises, Japanese chip-related shares follow, and Advantest is the symbol of that today,” said Kazuaki Shimada, chief strategist at IwaiCosmo Securities. Chip-testing equipment maker Advantest climbed 4.02%, while Ibiden, a supplier to AI bellwether Nvidia , was up 5.27%.

Murata Manufacturing, a leading maker of multi-layer ceramic capacitors (MLCCs) used to regulate power in AI servers, jumped 10.25%.

“What is different from previous rallies of Japanese stocks is that investors are buying both value and growth stocks.

That is supported by a strong corporate outlook,“ Shimada said.

Toppan Holdings jumped 10.78% to become the biggest percentage gainer on the Nikkei, after the printing and packaging firm said its first-quarter net profit more than doubled from a year earlier.

Banks, icons for value shares, rose, with Mitsubishi UFJ Financial Group and Mizuho Financial Group up nearly 3% each.

Of all the companies on the Topix, whose fiscal year ends in March, about 18% raised their annual recurring profit forecasts in the first quarter, compared with 2% which downgraded their forecasts, according to Shimada.

Of the more than 1,500 stocks trading on the Tokyo Stock Exchange’s prime market, 64% rose, 32% fell and 3% traded flat.