Nikkei rises as Advantest's higher profit forecast lifts chip stocks

TOKYO: Japan’s Nikkei share average rose on Thursday as Advantest’s higher profit forecast lifted chip-related stocks, while banks pulled down the broader Topix.

The Nikkei rose 1.28% to 62,218.41 by the midday break, while the Topix fell 0.29% to 3,962.68.

Advantest jumped 11.49% after raising its annual operating profit forecast by 35% on Wednesday as AI spending drives demand for its chip-testing equipment.

“Thanks to Advantest’s tremendous outlook, shares in other chip-related stocks rose,” said Kazuaki Shimada, chief strategist at IwaiCosmo Securities.

Chip-making equipment maker Tokyo Electron rose 5.32%. Memory maker Kioxia jumped 9.41%. Shimada said global concerns over heavy spending on AI infrastructure outpacing revenue growth eased after Microsoft signalled its massive spending bets were paying off.

Nasdaq and S&P futures were up 1% and 0.5%, respectively, in Asian trading, signalling a potential rebound of US technology stocks later in the day, said Shimada.

Wall Street ended sharply lower overnight after the Federal Reserve held interest rates steady, with AI-related chip stocks adding to recent declines ahead of quarterly reports from Microsoft and Meta Platforms.

The Nasdaq 100 index marked an 11% drop from its June record high.

In Japan, Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group lost 3.18% and 2.15%, respectively.

“This is a typical trend in recent sessions where AI-related shares are strong, value shares such as banks are sold off,” said Shimada.

Toyota Motor fell 1.71%.

System integrator Nomura Research Institute lost 6% to become the biggest percentage loser on the Nikkei.

Of the more than 1,500 stocks trading on the Tokyo Stock Exchange’s prime market, 35% rose, 62% fell and 2% traded flat.