TOKYO: Japan’s Nikkei share average rebounded strongly on Wednesday, putting it on course to snap a four-day losing streak as tech shared surged, tracking overnight gains in US peers.
The Nikkei ended the morning session 0.93% higher at 32,842.39, following a more-than-3% slide over the previous four sessions.
The benchmark index reached a 33-year peak last week at 33,772.89.
The broader Topix gained 1.12% to 2,279.01. Tech surged 1.31% to be the best performing Nikkei sector. Of the index’s 225 components, 184 rose versus 39 that declined, with two flat.
“With the Nikkei rebounding for the first time in five sessions, it’s very likely that it will stay firmly positive throughout the day,” said Maki Sawada, a strategist at Nomura Securities.
“Several technical indicators are showing that the temporary overheating in the market has calmed down.”
The Nikkei’s 14-day relative strength index (RSI) stood at 59 on Wednesday, back from the 70 line that many analysts consider to signal overbought conditions.
On Wall Street, the tech-heavy Nasdaq was the best performer among the big three indexes, rallying 1.75%.
The Philadephia SE Semiconductor Index, measuring chip-related shares, surged 3.6%.
Chipmaking equipment giant Tokyo Electron and Chip-testing machinery maker Advantest gave the Nikkei the biggest boost, contributing 25 index points and 21 index points respectively with gains of 1.27% and 1.74%.
The yen’s slide to the lowest since November against the dollar boosted exporters, with Toyota Motor rising 2.26%.
Financial shares got a lift from higher bond yields, led by Nomura Holdings’ 2.88% surge.
The biggest percentage gainer was Nippon Sheet Glass , which soared 8.1% after announcing the disposal of a Russia joint venture and a gain of 5 billion yen ($34.73 million) related to equity method investments.
At the other end, the Tokyo Stock Exchange’s shipping index - which had surged more than 7% in the previous two sessions - suffered a 2% slide.
Kawasaki Kisen Kaisha slumped 8.1% to be the Nikkei’s worst performer.