TOKYO: Japan’s Nikkei share average surrendered early gains to trade flat on Wednesday, as investors sold chip-related heavyweights to book profits from a recent rally.
The Nikkei was down 0.03% at 39,677.42 by the midday break, after rising 0.7% earlier in the day to 39,971.06.
The index swung between marginal gains and losses during the session. The broader Topix was up 0.3% at 2,824.93.
“The Nikkei opened higher, supported by the yen’s weakness against the dollar. But as soon as the Nikkei rose closer to the 40,000 level, investors sold stocks to book profits,” said Shuutarou Yasuda, a market analyst at Tokai Tokyo Intelligence Laboratory.
“Overall, the market is firm, with the Topix rising. Investors are rotating their targets day to day.”
Chip-related heavyweights Advantest and Tokyo Electron gave up early gains and were trading down 1.87% and 0.92%, respectively. Uniqlo-brand owner Fast Retailing lost 1.18%.
Automakers rose on the back of a weaker yen, with Toyota Motor and Honda Motor up 1.36% and 2.83%, respectively. The yen weakened 0.2% to 146.91 against the dollar.
The greenback extended gains as US President Donald Trump pledged more trade-related proclamations after announcing 25% tariffs on Japan and other trade partners.
A weaker Japanese currency tends to boost shares of exporters, as it increases the value of overseas profits in yen terms when firms repatriate them to Japan.
Energy-related shares rose after oil prices hit a two-week high overnight.
An index for oil refiners jumped 3% to become the top performer among the Tokyo Stock Exchange’s 33 industry sub-indexes.
Yoshinoya Holdings jumped 6.56% after the fast-food chain known for “gyudon” beef bowls reported a 9% gain in quarterly net profit, supported by strong sales of its new ramen business.
Of the more than 1,600 stocks trading on the TSE’s prime market, 82% rose, 15% fell, and 2% traded flat.