TOKYO: Japan’s Nikkei share average fell in choppy trade on Friday, tracking overnight Wall Street declines, although a rebound in semiconductor stocks limited losses.
The Nikkei slipped 0.43% to 39,952.62 by the midday break, falling below the 40,000 mark for the first time since July 2.
The broader Topix was down 0.63% at 2,850.47.
US stocks tumbled on Thursday, as investors continued to rotate away from high-priced megacap growth stocks and second-quarter earnings season gathered steam.
Of the Nikkei’s 225 constituents, 190 declined while only 34 advanced.
One share was untraded.
The benchmark index was on track for its worst weekly performance since mid-April, following a more than 2% decline on Thursday as chip-related stocks joined a global sell-off in the sector and a stronger yen weighed.
“Stocks have fallen a bit too far recently…. If I were asked whether stocks will fall further, I think prices have already dropped enough,” said Hiroshi Namioka, chief strategist at T&D Asset Management.
Investors appeared to rethink the sell-off of chip shares that was at least partly in response to a report that the US was mulling tighter curbs on exports of advanced semiconductor technology to China.
The market may be reacting to better-than-expected earnings results from TSMC, the world’s largest contract chipmaker, said T&D Asset Management’s Namioka.
Chip-related shares were among the top gainers in the morning session.
Renesas Electronics was up 2.9%. Nikkei heavyweights Tokyo Electron and Advantest climbed 2.3% and 2%, respectively, and were the biggest boost to the index.
Among the Tokyo Stock Exchange’s 33 industry groups, precision machinery was the best performer, gaining 0.9% after sliding to the bottom of the pack on Thursday.
In individual stocks, Disco, a maker of chip manufacturing devices, fell 4.7% to become the worst performer by percentage, after its financial results disappointed.