Japan's Nikkei rebounds from sharp loss as chip-related shares rise

Japan's Nikkei share average experienced a rebound from the previous day's sharp decline on Wednesday, with chip-related stocks leading the surge, while bank stocks continued to decline. The Nikkei rose 0.61% to 68,193.13 by midday, after ending 1.8% lower on Tuesday. The broader Topix inched 0.05% lower to 4,108.8. Despite chip-related stocks' gains, their progress was modest as investors awaited local firms' earnings reports and the U.S. midterm congressional elections, according to Shota Sando, an equity analyst at Tokai Tokyo Intelligence Laboratory.

Advantest and Tokyo Electron, both chip-related companies, rose 1.19% and 0.78% respectively. SoftBank Group also saw a gain of 2.15%. These companies' stocks continued to rise despite the US PHLX chip index falling for a fifth consecutive day. Notably, fibre optic cable manufacturer Fujikura surged 2.98%. Taiyo Yuden, a major player in multi-layer ceramic capacitors used in AI servers, witnessed the highest percentage increase of the day with a jump of 7.74%.

However, declines in bank stocks significantly impacted the Topix. Mitsubishi UFJ Financial Group dropped 1.83%, while Mizuho Financial Group and Sumitomo Mitsui Financial Group each fell by 2.48% and 1.85% respectively. Overnight, major investment bank stocks in the U.S. experienced a decline, with Citigroup dropping 5.6% and Goldman Sachs losing 0.2% after both exceeded profit estimates.

Out of over 1,500 stocks traded on the Tokyo Stock Exchange's prime market that day, 58% fell, 38% rose, and 2% remained unchanged.