The tech sector led gains after Taiwan Semiconductor Manufacturing Co (TSMC) - the world's top contract chipmaker - raised on Thursday its 2019 capital spending plan by up to $5 billion and forecast a nearly 10% rise in fourth-quarter revenue on strong demand for faster mobile chips and new high-end smartphones. Screen Holdings, a major chip industry supplier, gained 7.9% with trade volume reaching almost three times the average while Sumco rose 4.3%.
Tri Chemical Laboratories, maker of high-purity chemicals for semiconductor manufacturing, jumped 6.8%. Among bigger firms, Murata Manufacturing gained 1.2%, and Keyence rose 1.0%. While the market got an early boost from relief over Britain and the European Union striking a deal on the UK's departure from the bloc, soft Chinese GDP triggered profit-taking.
China's third-quarter economic growth slowed more than expected to 6.0%, its weakest pace in almost three decades. Still, overall sentiment remained positive as US corporate earnings have so far mostly beat market expectations. That also raised some hopes that Japanese companies' earnings outlook could bottom out soon. The Topix's forward earnings per share (EPS) has declined 9% to 122.86 since peaking in November.
At home, investor sentiment also benefited from a trade deal reached between Japan and the United States which the Japanese government said would likely boost the domestic economy by about 0.8%. Despite the small losses in Topix, advancers slightly outnumbered decliners by a ratio of roughly 21 to 20. Defensive shares, such as food companies, were among the worst performers as investors moved out of them to more cyclical shares. NH Foods dropped 2.4%, cosmetic firm Shiseido declined 3.1% and Keisei Electric Railway fell 2.1%.