Global Markets: Japan's Nikkei rebounds as AI shares gain, oil tempers broader mood

Japan's Nikkei share average rebounded on Thursday after a three-day losing streak, as AI-related shares tracked gains in the U.S. technology sector, although higher oil prices following renewed U.S.-Iran hostilities kept investor optimism in check. The Nikkei 225 index climbed 1.4% to close at 67,743.85, trimming some gains after rising as ‌much as ⁠2.4% earlier. ⁠The broader TOPIX rose 0.4% to 4,020.37. Semiconductor-related shares anchored the Nikkei's rise, with flash memory chipmaker Kioxia surging 8.3% and chip testing equipment maker Advantest jumping 5.9%, while chip equipment manufacturer Tokyo Electron advanced 5.5%.

Overnight, the Nasdaq rose following a more than $30 billion chip-supply agreement between Broadcom and Apple , and a report that China plans to allow its top AI firms to buy a limited ⁠number of ‌Nvidia's H200 chips.

The news on China "appears to have fuelled expectations for business expansion across Nvidia's supply chain, including in Japan," said Wataru ⁠Akiyama, an equities strategist at Nomura Securities. Meanwhile, concerns about the Middle East returned to the fore after U.S. President Donald Trump declared that an interim agreement to end the war with Iran was "over."


The U.S. military said on Wednesday it was launching fresh strikes on Iran aimed at keeping the Strait of Hormuz open to traffic and in response to Tuesday's assault on three cargo ships transiting the strait. Oil prices ‌rose about 1% on Thursday. Japan's air transport sector shed 2.2% and transport equipment stocks lost 1.9%. Higher oil prices rekindled inflation concerns in the Japanese government bond market. ⁠Combined with worries over fiscal health, that pushed the benchmark 10-year JGB yield to a fresh 30-year high. Real estate, which is sensitive to interest rate moves, fell 1.3%. Market breadth was negative with 146 losers on the Nikkei against 77 winners, as the index's gains were skewed by heavily weighted stocks such as Advantest and Tokyo Electron.

The biggest percentage losers in the index included Mitsubishi Materials Corp, down 6.9%, and Yokohama Rubber Co Ltd, down 3.5%.