Japan's Nikkei rebounds as exporters, chip issues find favor

Japan's benchmark Nikkei stock index rebounded on Thursday from its 10-month closing low, as a weaker yen lifted exporter shares, while chip-oriented issues also found favor.

The 225-issue Nikkei Stock Average added 103.94 points, or 0.40 percent, from Wednesday to close the day at 25,820.80.

The broader Topix index, meanwhile, edged up 0.75 point, or 0.04 percent, to finish at 1,868.90.

Dealers here said minutes of the U.S. Federal Reserve's December meeting showing that the central bank remained committed to tackling soaring inflation, although said the pace of its aggressive rate hikes would slow, lifted the U.S. dollar versus the yen.

This, they said, helped give exporter issues, the companies of which are typically reliant on a weaker yen to boost profits when repatriated and enhance price competitiveness in overseas markets, a lift.

But gains, market strategists here said, were capped by concerns the Bank of Japan (BOJ) may be heading towards tightening its ultra-loose monetary policy in line with its global peers, and in doing so impacting corporate and private borrowing costs and demand.

"With the outlook for monetary policy increasingly murky, the rebound in Japanese shares is likely to be capped," Maki Sawada, a strategist at Nomura Securities in Tokyo, was quoted as saying.

Other analysts pointed towards some circumspection and profit-taking ahead of key U.S. jobs data due out later this week for further clues as to the future direction of the Fed's monetary policy.

"After locking in some gains, investors adopted a wait-and-see stance ahead of the release of U.S. employment data due Friday. They are also reluctant to hold positions ahead of a three-day weekend in Japan," Yutaka Miura, senior technical analyst at Mizuho Securities Co., was quoted as saying.

Chip-oriented issues followed their U.S. peers higher overnight, following the U.S. Philadelphia SE Semiconductor index climbing 2.7 percent.

Among these, Nikkei heavyweight Tokyo Electron jumped 4 percent, while chip-testing equipment maker Advantest gained 2.1 percent.

Sony Group and Honda Motor added 2.2 percent on the back of the unveiling of their collaborative prototype electric car, gaining 2.2 and 0.7 percent, respectively.

Among other carmakers lifted by the yen's retreat versus the U.S. dollar, Suzuki Motor added 1.1 percent, while Subaru closed 1.4 percent higher.

Glass manufacturer Nippon Sheet Glass was the Nikkei's biggest gainer, surging 7.6 percent.

By the close of play, electric appliances, glass and ceramics products, and service issues comprised those that gained the most.

Insurance, bank, and air transportation issues, meanwhile, were among notable decliners.

Issues that fell outpaced those that rose by 1,114 to 662, while 62 ended the day unchanged.

On the Prime Market on Thursday, 1,128.00 million shares changed hands, dropping from Wednesday's volume of 1,244.87 million shares.

The turnover on the second trading day of the week came to 2,588.14 billion U.S. dollars (19.48 billion U.S. dollars).