Japan’s Nikkei edges up on auto, chip stock gains; growth shares drag


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TOKYO — Japan’s Nikkei share average rose marginally on Friday, supported by gains in automakers amid a weaker yen and a rebound in chip stocks from steep losses in the previous session.

However, declines in growth stocks amid higher U.S. yields acted as a cap, keeping the benchmark index on track to snap a three-week winning streak.

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The Nikkei finished the morning session 0.17% higher at 27,978.06, easing back after breaching the psychologically key 28,000 level. For the week, the index has lost about 1%, following a 3.9% surge last week.

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The broader Topix added 0.29% to 1,972.07 for the day, trimming its losses for the week to 0.29%. The Topix growth share index rose just 0.13% on Friday, compared to a 0.46% gain for value shares.

Overnight, the U.S. S&P 500 slipped 0.3% as St. Louis Federal Reserve Bank President James Bullard said more interest rate hikes are necessary, with those comments supported by data showing continued tightness in the U.S. labor market. Long-term Treasury yields bounced from six-week lows.

Amid an absence of strong trading cues leading up to the next U.S. payrolls report at the start of December, “the Nikkei is likely to continue to fluctuate in a range between 27,500 and 28,100,” said Kazuo Kamitani, an equity strategist at Nomura.

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On the day, tech investor SoftBank Group was the biggest drag on the Nikkei, shaving off 35 index points with its 2.71% slide.

Online retailer Rakuten Group, another growth stock, was the biggest percentage decliner, dropping 3.27%.

However, winners outnumbered losers among the Nikkei’s 225 components by 174 to 40, with 11 shares flat.

Automakers outperformed as the yen stabilized around 140 per dollar, after reaching its strongest level since August earlier in the week at 137.665. A stronger yen cuts the value of repatriated overseas revenues.

Mitsubishi Motors rallied 3.81%, Isuzu gained 3.26% and Mazda was up 3.1%. Toyota added 0.45%.

Chip-making equipment makers rebounded after a recovery in their U.S. peers. The Philadelphia SE Semiconductor Index rose 1.05% overnight, clawing back some of the previous day’s 4.26% plunge.

Advantest rose 1.12% and Tokyo Electron added 0.36%. (Reporting by Kevin Buckland; Editing by Savio D’Souza)


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