TOKYO: Japan’s Nikkei share average advanced 1% on Monday ahead of trade talks between the US and China in London later in the day, with investors watching for any easing of restrictions over semiconductor shipments.
Both countries are under pressure to relieve tensions, with China dominating global exports of rare earth minerals needed for chips and other advanced technologies, while the US has curtailed exports of chip-design software to China.
A phone call between US President Donald Trump and Chinese counterpart Xi Jinping on Thursday led to the Monday talks, with Trump later saying rare earth supply would no longer be a problem for the United States.
Japan’s Nikkei bounces as US tariff fears ease, yen softens
The Nikkei rose 1.05% to 38,137.09 as of the midday trading recess.
The broader Topix rose 0.63%.
A sub-index of growth shares rallied 0.8%, outpacing a 0.47% rise in value shares.
Chip-testing equipment maker and Nvidia supplier Advantest was Nikkei’s biggest gainer in index-point terms with a 5.17% climb.
“The trade talks in London are at the very least a step in the direction of easing restrictions on chip shipments between the US and China,” buoying the sector on Monday, said Yunosuke Ikeda, chief macro strategist at Nomura.
Artificial intelligence-focused startup investor SoftBank Group jumped 4.03%. Chip-sector stocks Disco and Lasertec rose about 3% each.
Otsuka Holdings, the Nikkei’s biggest percentage gainer, soared 8.65% after the drugmaker said its experimental therapy for a potentially life-threatening kidney disease more than halved severe levels of protein in the urine of patients.
On the other end, iSpace was poised to fall by the daily limit for the second straight session after its second failed attempt to put a lunar lander on the moon last week.
The stock was set to slide 20%, with offers to sell outnumbering bids by 9-to-1.