Global Markets: Japan's Nikkei ends higher as chip-related heavyweights jump

Japan's Nikkei share average ended higher on Tuesday, as chip-related heavyweights recovered from heavy losses in the previous session.

The Nikkei closed up 2.17% at 65,416.63. The index fell 3.85% on Monday, its largest one-day loss in three months.

The Nikkei was ‌choppy earlier ⁠in ⁠the session, inching down as much as 0.16%.


The broader Topix rose 1.14% to ​3,896.11.

Chip-making equipment maker Tokyo Electron jumped 8.91% and chip-testing equipment maker Advantest gained 4.34%, becoming the biggest source for the Nikkei's gain.

Meanwhile, technology investor SoftBank Group and fibre optic cable maker Fujikura reversed earlier losses ​and ended 1.03% and 2.23% higher, ⁠respectively.

"Confidence for ‌AI-related shares remains strong, but there was caution ​for the ​fast-paced rally in the market earlier in the ⁠session," said Kazuaki Shimada, chief strategist at IwaiCosmo Securities.

"Investors ​might have sold stocks to raise money to ​buy SpaceX ahead of its initial public offering this week," he said.

The Nikkei crossed above 68,000 to a record high earlier this month on optimism for the growth of AI-related shares. The index has risen nearly 30% so far this ‌year.

Monday's heavy sell-off followed sharp declines in U.S. technology stocks at the end of last week.

Financials rose ​on Tuesday as ​the market ⁠braced for the Bank of Japan's interest rate hike at its policy meeting next week. Mitsubishi UFJ Financial Group and Mizuho Financial Group rose ​0.38% and 1.69%, respectively.

Meanwhile, Uniqlo-brand owner Fast Retailing fell 0.96% to weigh on the Nikkei the most.

Of more than 1,500 stocks trading on the Tokyo Stock Exchange's prime market, 53% rose, 42% fell, and 3% traded flat.