Japanese shares rise on chip gains, earnings outlook

Of all the companies on the Topix, whose fiscal year ends in March, about 18% raised their annual recurring profit forecasts in the first quarter, compared with 2% which downgraded their forecasts, according to Shimada.

Of the more than 1,500 stocks trading on the Tokyo Stock Exchange's prime market, 51% rose, 45% fell and 3% traded flat.

Japanese shares rose on Thursday, with the broader Topix hitting a record high, as chip-related stocks tracked U.S. peers higher and a robust earnings outlook for local firms lifted sentiment.

The Nikkei .N225 climbed 1.6% to 68,605.51 by 0221 GMT. The broader Topix .TOPX rose 0.51% to 4,160.28, extending gains to a seventh straight session.

The S&P 500 and the Nasdaq ended higher on Wednesday, lifted by upbeat quarterly results from CoreWeave CRWV.O and other AI infrastructure firms, while mild inflation data reinforced bets that the U.S. Federal Reserve will hold interest rates steady in September. The PHLX Semiconductor Index .SOX advanced about 2.5%.

"When the SOX index rises, Japanese chip-related shares follow, and Advantest is the symbol of that today," said Kazuaki Shimada, chief strategist at IwaiCosmo Securities.

Chip-testing equipment maker Advantest 6857.T climbed 5.35%, while memory chip maker Kioxia 285A.T jumped 10.01%. Ibiden 4062.T, a supplier to AI bellwether Nvidia NVDA.O, was up 9.77%.

"What is different from previous rallies of Japanese stocks is that investors are buying both value and growth stocks. That is supported by a strong corporate outlook," Shimada said.

Toppan Holdings 7911.T surged 14% after the printing and packaging firm said its first-quarter net profit more than doubled from a year earlier.