After tough September, Nikkei rebounds on boost from chip, energy shares

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TOKYO — Japan’s Nikkei share average rose sharply on Monday, starting October on a solid footing as chip-related stocks rallied and energy shares tracked gains in crude oil prices.

The market’s mood was also buoyed by Japan Inc’s plans to boost capex this fiscal year in a quarterly Bank of Japan (BOJ) survey of corporate sentiment.

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The Nikkei extended gains in the final hour of trading to finish 1.07% higher at 26,215.79, after falling as much as 1.22% earlier in the day.

The broader Topix advanced 0.63% to 1,847.58, rebounding from losses as steep as 1.12%.

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Both indexes posted their worst month in September since the COVID-19 pandemic first rocked markets 2-1/2 years ago.

Although the BOJ’s “tankan” survey showed a worsening of business mood amid heated inflation, big manufacturers expect an improved environment three months from now and plan to increase capital expenditure by 21.5%.

“My impression of this tankan survey is positive,” said Kenji Abe, an equity strategist at Daiwa Securities.

It shows companies are raising prices and expect a weaker yen, which will boost exporters, signaling “some positive numbers for Japanese corporate earnings going forward,” he added.

Abe predicts the Nikkei will rise toward 27,000 this month.

The yen briefly weakened beyond 145 per dollar on Monday for the first time since Japanese authorities intervened on Sept. 22 to support the currency.

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Energy was the Nikkei’s best-performing sector on Monday, climbing 2.6% as crude prices rallied amid talk of OPEC+ production cuts this week.

The Nikkei’s biggest gainer by index points was chipmaking-equipment maker Tokyo Electron, which added 57 points with a 4.59% advance. Peer Advantest followed, contributing 22 points with a 4.78% rally.

That’s after chipmaker Mimasu Semiconductor Industry Co , which is not listed on the Nikkei, jumped 12.54% on the back of a strong forecast for earnings this fiscal year.

Other notable winners included Toyota Motor, up 3.49%, Sony Group, 2.4% higher, and start-up investor SoftBank Group, rising 1.65%. (Editing by Subhranshu Sahu)