Japan's Nikkei ends higher as chip shares gain, BOJ's rate hike prospects weigh
SOXX•Nikkei closes higher as chip stocks track U.S. peers
Japan's Nikkei share average ended higher on Thursday, as chip-related stocks tracked U.S. peers higher overnight, though prospects for an early rate hike from the Bank of Japan limited gains.
The Nikkei .N225 rose 0.46% to 66,422.6, while the broader Topix .TOPX gained 0.51% to 4,053.88.
Overnight, the Philadelphia SE Semiconductor index .SOX, a reference for the Nikkei, rose 0.4%. Alphabet GOOGL.O said that it expects to spend between $195 billion and $205 billion in capital expenditures, compared with the earlier plan of $180 billion to $190 billion this year.
"Sentiment improved after Alphabet raised its outlook for investments, and U.S. chip stocks inched up," said Shuutarou Yasuda, a market analyst at Tokai Tokyo Intelligence Laboratory.
"On the other hand, bets that the BOJ may raise interest rates early hurt sentiment. Until now, the central bank tried to support the economy while raising rates, but that stance may change, which is negative for stocks led by domestic demand."
Chip, bank and retail shares move on rate-hike expectations
In Japan, AI and chip-related shares advanced, with Advantest 6857.T jumping 4.11%. Technology investor SoftBank Group 9984.T rose 3.77%.
Memory chip maker Kioxia 285A.T reversed early gains to end 3.72% lower. Chip-making equipment maker Tokyo Electron 8035.T also erased gains to end 0.02% lower.
Bank shares rose along with Japanese government bond yields, which rose on bets of an early rate hike.
Mizuho Financial Group 8411.T rose 2.78%. Sumitomo Mitsui Financial Group 8316.T and Mitsubishi UFJ Financial Group 8306.T climbed more than 2% each.
Shares of retailers, which rely on domestic demand, fell, with Takashimaya 8233.T dropping 6.14% to become the biggest percentage loser on the Nikkei. Isetan Mitsukoshi Holdings 3099.T fell 4.65%.
