TOKYO: Japan’s Nikkei share average rebounded on Monday from a three-month low hit in the previous session, after Wall Street closed higher at the end of last week on a benign inflation report.

The Nikkei rose 1.99% to 38,415.75 by the midday break in a broad-based rally, while the broader Topix was up 1.88% at 2,750.28.

The Nikkei fell for an eighth straight session on Friday, hitting its weakest level since late April amid a surge in the yen and declines in US technology stocks.

Wall Street’s major indexes ended higher on Friday as investors flocked back to tech megacaps that had triggered broad sell-offs earlier in the week, and US inflation data boosted optimism that the Federal Reserve will soon commence cutting interest rates.

“The decline in US technology shares has finally paused… so that seems to be working as a positive factor” for Japanese equities, said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management.

Investors snapped up shares on the dip, with all but 10 shares of the Nikkei’s 225 constituents advancing. Big names surged to give the overall index a hefty lift. Chip-related shares Tokyo Electron and Advantest were up 2.7% and 3.4%, respectively.

AI-focused startup investor SoftBank Group climbed nearly 3%, and Uniqlo parent Fast Retailing rose 1.4%.

All 33 of the Tokyo Stock Exchange’s industry sectors gained.

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The rally comes ahead of the Bank of Japan and the Fed’s policy meetings on July 30-31, and earnings from more of the United States’ so-called Magnificent Seven.

Among individual stocks, Shin-Etsu Chemical surged 6.8% after the silicon wafer maker beat its operating profit forecast for the April-June period.

Eisai tumbled 12% to hit the bottom of the pack, after the European Union regulator rejected the drugmaker’s Leqembi treatment for early Alzheimer’s disease.