Japan's Nikkei hits six-week high as Micron forecast lifts chip stocks

TOKYO: Japan’s Nikkei share average rose to a more than six-week high on Thursday, driven by gains in a handful of heavily weighted chip-related shares after robust earnings from Micron Technology fuelled optimism over AI-related investment.

The Nikkei 225 Index rose 2.28% to 68,276.92, its highest since August 18.

The broader Topix edged 0.03% higher to 4,109.4.

A summary of opinions from the Bank of Japan’s September policy meeting, released on Thursday, showed some policymakers saw a need to accelerate the pace of rate hikes or move rates closer to the central bank’s target level sooner, reinforcing expectations of further tightening.

“Amid continued uncertainty over the Middle East, inflation risks appear to be coming back into focus in Japan’s stock market,” said Wataru Akiyama, equity strategist at Nomura Securities.

Micron forecast quarterly revenue above estimates on Wednesday and said customers had increased commitments under its long-term supply agreements to $32 billion, signalling unabated demand for AI memory chips. Still, Akiyama cautioned against reading too much into the rally in AI-related shares.

He said, “earnings from companies such as Micron Technology are certainly positive factors, but we need to bear in mind the possibility that any gains may be driven by one-off earnings-related news.”

AI-related shares reacted positively to Micron’s forecast, with chip testing equipment maker Advantest jumping 7%, electronic components maker Murata Manufacturing surging 6% and memory chipmaker Kioxia up 4%. Market breadth was negative, with 157 decliners versus 68 gainers on the Nikkei.

The largest losers by percentage on the index were insurer Tokio Marine Holdings, down 4.11%, followed by insurer T&D Holdings, which fell 3.18%, and regional bank Fukuoka Financial Group, which lost 3.02%.