Japan’s Nikkei rebounds from 3-week low as chipmakers, shippers recover

TOKYO (Reuters) – Japan’s Nikkei stock average recovered from a three-week low in the previous session on Tuesday, as shares in the chip sector followed an overnight rally against their U.S. peers.

The Nikkei .N225 closed the morning session up 0.2% at 39,676.34, ending a four-day losing streak that saw the benchmark index fall for the first time since July 2 to 39,519.39 on Monday.

The index rose as much as 0.8% earlier in the session, but failed to reach the psychological level of 40,000.

The broader Topix .TOPX rose 0.4%.

The Nikkei’s top three gainers were all chip-related stocks, led by chip test equipment maker and Nvidia supplier Advantest 6857.T, which rose 1.82%, and followed by chip-making machinery giant Tokyo Electron 8035.T, which rose 0.9%. Shares of silicon processor Shin-Etsu Chemical 4063.T rose 0.7%.

According to Kazuo Kamitani, equity strategist at Nomura Securities, the recovery in chip stocks, driven by the recent rally in Nvidia and similar stocks in the US, is driving the Nikkei higher.

There is also a natural recovery after the recent major sell-off in the Nikkei.

The best performer among the 33 industry groups on the Tokyo Stock Exchange was shipping .ISHIP.T, which rose 6.81 percent, outpacing the 1.56 percent growth of second-place banking .IBNKS.T.

Shippers rose after Nippon Yusen 9101.T raised its profit forecast after market close on Monday.

Nippon Yusen was the Nikkei’s biggest percentage gainer, up 7.9%, followed by peer Kawasaki Kisen Kaisha 9107.T, which rose 7.3%.