Nikkei rose as Japan stocks jump after two-day declines, chip stocks advance

TOKYO: Japanese shares jumped on Thursday as investors scooped up chip-related and cyclical shares following a two-day decline across all sectors, with sentiment aided by an upbeat finish on Wall Street overnight.

The main indexes gained the most in more than seven weeks, with the Nikkei share average jumping 2.38 per cent to close at 29,188.17, while the broader Topix rose 1.82 per cent to 1,922.50.

Concerns about an economic slowdown amid preparations of fresh measures to tackle the spread of the virus eroded about 4 per cent from the Nikkei and 3.5 per cent from the Topix index over the last two days.

"Investors are buying stocks as prices have become reasonable after declines in the past two days," said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management.

"An introduction of a state of emergency makes investors wary, but the number of new infections could fall. That might be factored into today's market."

Chip-related shares advanced, with Tokyo Electron gaining 4.58 per cent, Advantest rising 4.2 per cent and Shin-Etsu Chemical climbing 3.45 per cent.

Nidec, known for making precision motors used in computer hard drives, gained 4.49 per cent ahead of its earnings announcement on Thursday. The company is one of the first major manufacturers to disclose outlook in the earnings seasons.

Nidec was the top gainer among the top 30 core Topix names, followed by Keyence Corp.

Shipping firms also advanced, with Kawasaki Kisen rising 5.5 per cent and Mitsui OSK Lines gaining 3.81 per cent.

The underperformers on the Topix 30 were Nintendo, down 0.26 per cent, followed by Mitsubishi UFJ Financial Group, losing 0.16 per cent.

There were 207 advancers on the Nikkei against 13 decliners.