TOKYO: Japanese shares fell on Thursday as technology stocks tracked the Nasdaq’s overnight decline, while financial shares rose amid bets for the Bank of Japan’s interest rate hike.
The Nikkei was down 0.83% at 38,033.22 by the midday break, while the broader Topix slipped 0.34% to 2,689.07.
“Chip-related shares fell to track US equities lower but overall the market struggled to find market-moving cues after Nvidia reported its earnings,” said Shingo Ide, chief equity strategist at NLI Research Institute.
The tech-heavy Nasdaq closed lower on Wednesday, taking a break from the prior session’s rally, as investors worried about escalating Russia-Ukraine tensions and weak results from Target.
AI chipmaker Nvidia fell 0.76% during the trading session ahead of its results on Wednesday and fell further after the bell when its fourth-quarter revenue forecast was slightly above estimates, but failed to meet lofty expectations of some investors.
Nvidia’s outlook is key for the Nikkei share average, which is heavily affected by chip-related stocks, such as chip-testing equipment maker Advantest.
On Thursday, Advantest fell 2.74% and chip-making equipment maker Tokyo Electron inched down 0.05%.
Technology start-up investor SoftBank Group fell 1.86%.
Financial shares rose as bets over the BOJ’s policy rate hike lifted yields. Mizuho Financial Group rose 1.69% to become the biggest support for the Topix index.
Sumitomo Mitsui Financial Group gained 0.3% and insurer Tokio Marine Holdings rose 0.6%. Japanese government bond yields rose on Thursday, with the five-year bond yield hitting 0.725%, its highest level since August 2009.
Overnight Index Swap (OIS) indicated a 47.67% chance of the BOJ raising rates to 0.5% at its December policy meeting.
Tokyo Gas rose 5.21% to become the biggest percentage gainer on the Nikkei, following a 13% surge in the previous session.
US activist investor Elliott Management has taken a 5.03% stake in the nation’s biggest city gas provider.
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