Japan's Nikkei reverses gains to end lower as chip-related shares fall
Updates with closing prices
TOKYO, Jan 15 (Reuters) - Japan's Nikkei share average gave up early gains to end lower on Wednesday, dragged down by chip-related stocks, while uncertainties about the Bank of Japan's policy outlook weighed on sentiment.
The Nikkei .N225 slipped 0.08% to 38,444.58, reversing the index's as much as 0.78% gain earlier in the session. The benchmark extended losses to the fifth straight session.
"The chip-related stocks were weak, which is why the Nikkei ended lower. The market momentum was not that bad, with the Topix closing higher," said Naoki Fujiwara, senior fund manager at Shinkin Asset Management.
The broader Topix .TOPX rose 0.31% to 2,690.81.
Advantest 6857.T lost 3.45% to drag the Nikkei the most. The chip-testing equipment maker, a supplier to Nvidia NVDA.O, have slid 12% so far this week amid news that the U.S. government would further curb artificial intelligence chip and technology exports.
Chip-making equipment maker Tokyo Electron 8035.T fell 1.4%.
Uncertainties about the BOJ's rate policy weighed on investor sentiment, Fujiwara said.
The BOJ will raise interest rates and adjust the degree of monetary support if improvements in the economy and price conditions continue, Governor Kazuo Ueda said.
Financials rose on the growing hopes of a rate hike, with Mitsubishi UFJ Financial Group 8306.T and Sumitomo Mitsui Financial Group 8316.T gaining 1.77% and 2.4%, respectively.
The banking index .IBNKS.T climbed 2.24% to become the top performer among the Tokyo Stock Exchange's 33 industry sub-indexes.
Fast Retailing 9983.T, which operates Uniqlo clothing stores, climbed 1.3% to lend the biggest support to the Nikkei.
Overnight, the S&P 500 advanced and U.S. Treasury yields fell after data showed producer prices increased modestly last month.
"Rising U.S. yields hurt the Japanese stock market. But if excessive caution for inflation and a possible rate hike in the U.S. eases, the market will regain momentum," said Shuutarou Yasuda, a market analyst at Tokai Tokyo Intelligence Laboratory.
(Reporting by Junko Fujita; Editing by Sumana Nandy)
((junko.fujita@thomsonreuters.com;))
Related Articles
Can Earnings Season Be the Catalyst for U.S. Stocks?
TradingKey - Fears of persistent inflation, driven by strong employment data and Trump’s potential policies, have raised concerns that the Federal Reserve may scale back planned rate cuts. Combined with worries over high valuations and a potential stock market bubble, these factors have increased se
What to Watch When TSMC Reports Q4 2024 Earnings
TradingKey - Semiconductors have been in the news for the past two years on the back of the Artificial Intelligence (AI) revolution. That’s because the chips are powering everything AI – from data centres to large language models (LLMs).
U.S. Banking Sector Q4 2024 Earnings Preview
Banks are anticipated to shift their focus from interest rate-driven gains to growth in trading volume. While net interest income may continue to decline, the rate-cutting environment could alleviate the intense competition for deposits, as customers may seek fewer high-yield products.
What Impact Will California Wildfires Have on The Stock Market?
TradingKey - Right now in the US, there are ferocious wildfires that are destroying acres of both land and homes in California. Being spread by strong winds, the fires are also heading towards major urban centres, like Los Angeles.
