Japan's Nikkei snaps six-day losing streak as AI shares rebound

Tokyo: Japan's Nikkei share average broke a six-day losing streak on Friday as artificial intelligence-linked shares rebounded, though gains were restrained by caution heading into corporate earnings reports and US midterm elections. The Nikkei climbed 1.39% to 65,324.29 after a 5% drop the day prior. The index slipped 5.37% for the week. The broader Topix surged 1.67% to 4,066 but declined 0.95% for the week.

Investors rushed to buy stocks after a sharp sell-off in the previous session, with no other catalyst for the uplift, according to Daisuke Hashizume, senior strategist at Daiwa Securities. Market participants see limited incentive to purchase shares aggressively before corporate earnings and the US midterm elections next month. Analysts are monitoring whether the election outcome could impact US President Donald Trump's plans for $5,000 direct payments to US adults and increased military spending.

In Japan, chip-making equipment firm Tokyo Electron surged 2.56%, memory chip maker Kioxia rose 3.84%, and technology investor SoftBank Group climbed 1.9%. Advantest, a chip-testing equipment maker, made up for early losses to close 0.55% higher. BayCurrent surged 17.25% to become the top percentage gainer on the Nikkei after announcing it would reinvest excess cash into investments and share buybacks.

Banks provided support for the Topix, with Mitsubishi UFJ Financial Group and Mizuho Financial Group rising 1.82% and 1.72%, respectively.

Of the over 1,500 stocks trading on the Tokyo Stock Exchange's prime market, 83% climbed, 14% fell, and two percent remained unchanged.