Nikkei Rebounds 1.4% to End Six-Day Slide

Japan’s Nikkei 225 snapped a six-session losing streak on Friday, climbing 1.39% to 65,324.29 as investors bought back battered artificial intelligence and chip shares, Reuters reported. The gain of 898.34 points only partly repaired the damage from earlier in the week, and the benchmark still finished with a weekly loss of 5.37%.

The broader Topix index advanced 1.67% to 4,066, trimming its weekly decline to 0.95%. Buying was broad-based: Reuters said about 83% of the more than 1,500 stocks on the Tokyo Stock Exchange’s Prime market ended higher.

Chip names lead the recovery

Semiconductor heavyweights that led Thursday’s sell-off were among the day’s supporters. Tokyo Electron gained 2.56%, memory maker Kioxia added 3.84% and SoftBank Group rose 1.9%, according to Reuters. Chip-testing equipment maker Advantest recovered from early losses to close 0.55% higher.

The standout performer was consulting firm BayCurrent, which surged 17.25% to top the Nikkei’s percentage gainers after saying it would deploy surplus cash into investments and share buybacks. Lenders also firmed, with Mitsubishi UFJ Financial Group up 1.82% and Mizuho Financial Group up 1.72%.

Daisuke Hashizume, a senior strategist at Daiwa Securities, described the move as a technical bounce, telling Reuters that investors were repurchasing shares after the previous session’s steep losses and that there were “no other factors for the gains.”

Recovering from a historic rout

Friday’s advance followed a plunge of nearly 5% on Thursday, when the index shed more than 3,300 points, one of the largest single-day point drops on record, according to BigGo Finance. That sell-off was driven by growing concern over the debt being used to finance the global AI build-out, along with hotter-than-expected US inflation data.

Trading Economics said sentiment improved after Taiwan Semiconductor Manufacturing Co posted record third-quarter profit and Nvidia chief executive Jensen Huang defended the financial health of AI cloud provider CoreWeave. Investors were also reassured that Federal Reserve Chair Kevin Warsh did not signal an imminent rate hike despite the firmer inflation figures. The data provider said the weekly fall was the Nikkei’s steepest since July.

Despite the rebound, the index remains well below its all-time high of about 73,000 set in June, Trading Economics data show.

What’s next

Analysts expect caution to cap gains in the near term. Hashizume said market participants saw little reason to buy aggressively before Japanese companies report earnings and before the US midterm elections next month. He added that traders are watching whether the election outcome affects US President Donald Trump’s proposals for US$5,000 payments to American adults and higher military spending, both of which could feed into inflation and interest-rate expectations.

With the Nasdaq closing out its worst week since June on Friday, Tokyo’s chip-heavy market is likely to remain sensitive to further swings in US technology shares when trading resumes on Monday.