Japan's Nikkei share average closed higher on Thursday, driven by a surge in chip-related stocks following a robust profit forecast from Advantest, while declines in banking shares pressured the broader Topix index lower. The Nikkei 225 advanced 0.71% to end at 61,867.43 points, contrasting with the Topix index which fell 0.54% to 3,952.5 points.
On Wednesday, Advantest soared 10.85% after the company raised its annual operating profit forecast by 35%, citing demand for chip-testing equipment fueled by artificial intelligence spending. "Thanks to Advantest's strong outlook, other chip-related stocks also rose," said Kazuaki Shimada, chief strategist at IwaiCosmo Securities.
Semiconductor manufacturing equipment maker Tokyo Electron gained 4.48%. Memory chip maker Kioxia rose 2.92%, while Murata Manufacturing, a leading manufacturer of multilayer ceramic capacitors (MLCCs) used for power regulation in AI servers, added 2.97%.
Shimada noted that concerns over massive AI infrastructure spending outpacing revenue growth have eased, after Microsoft indicated its heavy investments are yielding returns. He added that futures for the Nasdaq and S&P 500 were trading higher during the Asian session, signaling a potential rebound for US tech stocks later in the day.
This follows a sharp decline on Wall Street overnight, where the Federal Reserve held interest rates steady and AI-related chip stocks extended recent losses ahead of quarterly earnings reports from Microsoft and Meta Platforms. The Nasdaq 100 has fallen 11% from its June record high.
In Japan, Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group each fell more than 3%. "This is the typical trend seen in recent trading sessions, with AI-related stocks strengthening while value stocks like banks are sold off," Shimada said.
Toyota Motor declined 3%. System integrator Nomura Research Institute dropped 6.52%, making it the biggest loser on the Nikkei index. Among the over 1,500 stocks traded on the Tokyo Stock Exchange's Prime Market, 34% rose, 63% fell, and 1% remained flat.