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Broader Asian stocks also ticked lower in anticipation of more cues on the U.S. debt ceiling and a potential default.
The Nikkei 225 rose 0.6% and was trading just below 33-year highs hit earlier this week, after positive earnings from U.S. chipmaker NVIDIA Corporation (NASDAQ:NVDA) boosted local stocks that are exposed to the firm. Nvidia said increased interest in artificial intelligence will fuel chip demand this year.
The broader TOPIX added 0.2%, also moving back towards 33-year peaks.
Semiconductor testing equipment maker Advantest Corp. (TYO:6857) jumped 5.1% to a record high, while chipmakers Tokyo Electron Ltd. (TYO:8035) and Dainippon Screen Mfg. Co., Ltd. (TYO:7735) surged 6% and 9%, respectively.
Japanese stocks also benefited from a weaker-than-expected inflation print for Tokyo, which could herald more weakness in nationwide inflation and keep the Bank of Japan dovish.
Optimism over Nvidia spilled over into other chip-heavy indexes. The Taiwan Weighted index rose 1.2%, buoyed by gains in TSMC (TW:2330), while South Korea’s KOSPI edged 0.2% higher on strength in Samsung Electronics Co Ltd (KS:005930) and SK Hynix Inc (KS:000660).
But on the other hand, China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes fell 0.4% and 0.1%, respectively. The two were set to lose nearly 3% this week as concerns over worsening ties between Washington and Beijing battered sentiment towards Chinese markets.
China’s banning of local sales by U.S. chipmaker Micron Technology Inc (NASDAQ:MU) this week drove up fears of a renewed trade war between the two countries, although U.S. officials said the move had not “torpedoed” relations.
Rising COVID-19 cases and slowing economic growth also kept investors wary of China, with a new outbreak set to peak by late-June. Weak economic indicators for April showed that growth in the country was slowing despite the lifting of anti-COVID measures earlier this year.
Broader Asian markets were muted as focus remained on negotiations over raising the U.S. debt ceiling and avoiding a default. Negotiations were ongoing ahead of a June 1 deadline for a U.S. default, although lawmakers offered little indication that a deal was imminent.
A default is likely to result in a U.S. recession, and could have dire consequences for the global economy. This, coupled with a recession in Germany, kept appetite for risk-heavy stocks limited.
Australia’s ASX 200 index was flat, while Philippine shares led losses across Southeast Asia with a 0.8% drop.
