Japan’s Nikkei Reverses Gains on Chip Stocks, Profit Guidance

By Yasutaka Tamura

November 06, 2024 at 6:06PM EST

Pedestrians reflected in an electronic board displaying a graph of the exchange rate of the yen against the U.S. dollar outside a securities firm in Tokyo, Japan, on Thursday, May 2, 2024. Fresh data on the Federal Reserve's various accounts hints at two potential ways Japanese policy makers may have funded currency interventions this past week to bolster the beleaguered yen. Photographer: Toru Hanai/Bloomberg (Toru Hanai/Bloomberg)

(Bloomberg) -- Japan’s Nikkei 225 Stock Average dropped, weighed by chip-related stocks and by disappointing profit guidance. The Topix index held onto gains, buoyed by financials which rallied on the back of higher bond yields following Donald Trump’s presidential win.

The Nikkei was down as much as 1.2%, after earlier rising 1%. Chip-related companies including Lasertec Corp., Screen Holdings Co. and Tokyo Electron Ltd. slid more than 3% on growing concern Trump will impose tougher trade policies on China. Chip-device maker Minebea Mitsumi Inc. tumbled as much as 8.9% after its revised full-year net income forecast missed analyst estimates.

The broader Topix index was up 0.9% as of 11 a.m. in Tokyo, with insurers and banks among biggest drivers of the gauge’s gain. Japan’s 10-year yield earlier climbed to 1%, its highest in about three months, following moves in the US. Treasury yields rose Wednesday on expectations that Trump’s fiscal plans and proposal to hike tariffs will drive inflation higher and erode the ability of the central bank to trim borrowing costs.