Key Takeaways
- Japan’s Nikkei share average rose, following gains on Wall Street.
- Investors remain cautious ahead of chip equipment maker ASML's earnings report.
- Financial stocks saw gains, while shares of system developers fell.
Japan’s Nikkei share average traded higher on Wednesday, tracking overnight gains on Wall Street. The index was up 0.58% to 68,136 as of 01:52 GMT, after rising as much as 1.5% earlier in the session.
The broader Topix also edged up 0.21% to 4,047.62. The US S&P 500 and Nasdaq advanced overnight due to solid results from big banks and a cooler-than-expected inflation report, which boosted risk appetite amid rising tensions in the Middle East.
The US semiconductor index, a key barometer for Japanese chip-related shares, rose by 2.54%. This positive sentiment was reflected in gains across several major companies, including ASML’s peers Tokyo Electron and Advantest, both of which saw their stocks rise by 2.67% and 3%, respectively.
Financial institutions also experienced growth, with Mitsubishi UFJ Financial Group and Nomura Holdings gaining 1.5% and 2.87% respectively. However, shares of system developers faced a downturn following IBM’s warning that second-quarter revenue would fall below estimates, leading to declines in NEC, Nomura Research, Fujitsu, and computer maker BayCurrent.
The Nikkei was notably weighed down by SoftBank Group, which fell 2.74%, while Uniqlo-brand owner Fast Retailing slipped 0.49%. Of the more than 1,500 stocks trading on the Tokyo Stock Exchange’s prime market, 57% rose, 38% fell, and 3% traded flat.
Hitoshi Asaoka, chief strategist at Asset Management One, commented: 'The US shares were strong overnight, but the market is now cautiously waiting for the outcome of ASML earnings.' ASML, a major supplier of equipment used to manufacture AI chips, reports its quarterly earnings later in the day. Its performance will be crucial as it faces challenges from US export restrictions on China.
ASML’s earnings are expected to justify its high valuation and demonstrate how it can compete despite potential export limitations. The company's peer Tokyo Electron also rose 2.67%, while chip-testing equipment maker Advantest was up 3%.
'The US shares were strong overnight, but the market is now cautiously waiting for the outcome of ASML earnings.'
Hitoshi Asaoka, Chief Strategist at Asset Management One
