Japan’s Nikkei share average experienced an uptick on Wednesday, driven by a surge in chip-related shares following a robust performance on Wall Street and a positive outlook from chip equipment manufacturer ASML. The Nikkei closed 1.49% higher at 68,751.51, and the broader Topix rose 1.22% to 4,088.12. The S&P 500 and the Nasdaq advanced on Tuesday, as solid results from major banks and a cooler-than-expected inflation report enhanced risk appetite amid escalating tensions in the Middle East.
The U.S. semiconductor index, a barometer for Japanese chip-related shares, increased by 2.54%. ASML has revised its financial projections for 2026 upward during Asian trading hours, indicating plans to increase capacity following the announcement of second-quarter earnings that surpassed expectations, largely fuelled by demand in the AI sector. “The market was relieved that the earnings of ASML was strong,” said Fumio Matsumoto. “However, investors remain cautious regarding the potential resurgence of a robust rally in AI stocks, and it is likely that they will persist in reallocating their positions across various sectors.”
The tech-heavy Nikkei’s rally paused last month amid global concerns regarding the overvaluation of technology stocks. However, sentiment remained robust as investors redirected their attention towards value stocks, particularly in the financial sector. On Wednesday, ASML’s peer Tokyo Electron increased by 4.37%, while chip-testing equipment manufacturer Advantest saw a rise of 5.83%. Financial stocks experienced an uptick, as Mitsubishi UFJ Financial Group and Nomura Holdings increased by 2.69% and 4.7%, respectively.
Shares of system developers experienced a decline in response to a 25% drop in IBM’s stock price overnight, as the U.S. company issued a warning that its second-quarter revenue would fall short of expectations. NEC and Nomura Research experienced declines of 4.32% and 2.51%, respectively, while Fujitsu, a computer manufacturer, saw a loss of 4.7%. Consulting firm BayCurrent experienced a decline of 6.79%. SoftBank Group declined by 3.26%, exerting significant pressure on the Nikkei. Fast Retailing, the owner of the Uniqlo brand, experienced a decline of 0.49%.