Japanese shares end higher on chip gains, earnings outlook

Japanese shares experienced a record-high closing on Thursday, with both the Nikkei and Topix achieving new peaks. The gains were driven by chip-related stocks mirroring their US counterparts and an optimistic outlook for local firms. The S&P 500 and Nasdaq also saw gains due to positive earnings from AI infrastructure companies.

Mild inflation data further bolstered the belief that the US Federal Reserve would keep interest rates unchanged in September. Semiconductor Index (PHLX) rose by around 2.5%. Analyst Kazuaki Shimada attributed the rally to the fact that investors are purchasing both value and growth stocks, supported by strong corporate outlooks.

Companies like Advantest, Advantest, Ibiden, and Murata Manufacturing saw significant gains, with Murata Manufacturing jumping 10.25% as it reported a more than double increase in first-quarter net profit compared to the previous year. Banks also performed well, with Mitsubishi UFJ Financial Group and Mizuho Financial Group rising nearly 3% each.

Meanwhile, 18% of companies on the Topix raised their annual recurring profit forecasts in Q1, while only 2% lowered their forecasts, according to Shimada. Out of over 1,500 stocks trading on Tokyo Stock Exchange's prime market, 64% rose, 32% fell, and 3% remained unchanged.