Japan's Nikkei hits six-week high as Micron forecast lifts chip stocks

Japan's Nikkei share average reached a six-week high on Thursday, propelled by gains in select chip-related stocks following Micron Technology's impressive earnings, which bolstered confidence in AI-related investments. The Nikkei 225 Index climbed 2.28% to 68,276.92, marking its peak since August 18. The Topix index also rose marginally by 0.03% to 4,109.4.

The Bank of Japan's September policy meeting summary, published on Thursday, indicated that certain policymakers believed a quickening of interest rate hikes or a nearer approach to the central bank's target level was necessary, reiterating the possibility of further tightening measures. Wataru Akiyama, an equity strategist at Nomura Securities, noted in a statement that despite the current uncertainties surrounding the Middle East, inflation risks were resurfacing in Japan's stock market.

On Wednesday, Micron Technology announced quarterly revenue that surpassed analysts' expectations, revealing that customers had heightened commitments under its long-term supply agreements to $32 billion. This forecast signaled an ongoing demand for AI memory chips. However, Akiyama cautioned against interpreting the rally in AI-related stocks as a definitive trend, stating, "earnings from firms like Micron Technology are certainly encouraging, but we must consider the likelihood that any gains could be attributed to one-time earnings-related news."

AI-related shares responded favorably to Micron's forecast, with notable gains in testing equipment manufacturer Advantest (+7%), electronic components maker Murata Manufacturing (+6%), and memory chip producer Kioxia (+4%). Market breadth, however, was predominantly negative, with 157 stocks falling compared to 68 that gained on the Nikkei. Among the most significant decliners were insurance companies Tokio Marine Holdings (-4.11%), T&D Holdings (-3.18%), and regional bank Fukuoka Financial Group (-3.02%).