Japan, US discussing chip factory construction as part of $550 billion investment talks, Nikkei reports

Japan's Nikkei share average experienced a rise on Thursday as investors bought into gaming and pharmaceutical stocks, which had been underperforming. The sentiment was bolstered by a drop in crude oil prices and an anticipated decision from the US Federal Reserve. The Nikkei increased by 0.2 percent by 0157 GMT, after reaching a peak of 1 percent earlier in the session.

The broader Topix also gained 0.6 percent. On the previous day, Brent crude oil prices fell by 2.6 percent following reports of Saudi Arabia offering additional crude shipments through Oman, which eased concerns about potential supply disruptions in the Middle East. The Federal Reserve had raised its key interest rate by a quarter point as expected, and indicated the possibility of another rate hike this year.

Wataru Akiyama, an equities strategist at Nomura Securities, noted that the rise in stocks today was partly due to reduced uncertainty in the markets. However, he added that the Japanese stock market was not in a strong position overall. Interest rate-sensitive tech stocks were trading with a weak outlook ahead of the Bank of Japan's policy decision on Friday, and there was still a potential slowdown in AI development priced into the market.

The Bank of Japan is expected to raise rates by a quarter point. Notably, chip-sector giants Advantest and Tokyo Electron saw declines of 1.9 percent and 2.2 percent, respectively. Nevertheless, some AI-related stocks performed well, with SoftBank Group increasing by 1 percent and cable manufacturer Fujikura rising by 0.6 percent.

Investors also shifted their focus to gaming and pharmaceutical shares, which had lagged the broader market, causing Nintendo to rise by 3.8 percent and Konami to gain 3.7 percent. Shares of Sumitomo Pharma jumped 4.5 percent. On the downside, shares of oil-related companies fell as crude prices continued to decline, with Inpex dropping by 3.3 percent.