The Nikkei rose 1.34% to close at 50,883.68 and the broader Topix gained 1.38% to 3,313.45.
Overnight, U.S. stocks rebounded as jitters over inflated tech stock valuations abated and upbeat earnings and better-than-expected economic data fuelled risk appetite.
Chip-related Advantest rose 3.15% and technology investor SoftBank Group climbed 2.92%. Chip-making equipment maker Tokyo Electron reversed gains to end 0.36% lower.
Together, the three companies had accounted for nearly 80% of the Nikkei’s 2.5% decline on Wednesday.
“The Nikkei’s move has been heavily influenced by only a few stocks, such as SoftBank Group and Advantest. We need more stocks that will lead the Nikkei’s further gains,” said Takamasa Ikeda, senior portfolio manager at GCI Asset Management. In October, the Nikkei crossed the crucial 50,000 mark for the first time and climbed 16.64%, its biggest monthly gain in 35 years, while the Topix advanced 6.2%. “This huge gap in the gains of the two main indexes is unprecedented, and shows how much the Nikkei relied on the small number of stocks to rise. It is a sign of vulnerability of the Japanese stock market,” Ikeda said.
Among individual stocks, Konica Minolta jumped 15.45% to become the top percentage gainer on the Nikkei after raising its annual net profit forecast to 27 billion yen ($179 million), compared with year-ago loss of 47.4 billion yen.
Nippon Steel, Japan’s biggest steel maker, fell 3.28% after flagging a 14% decline in annual profit before one-offs for the current fiscal, excluding its outlook for U.S. Steel due to significant challenges in the U.S. market.
($1 = 150.7800 yen).