October 16, 2019 / 7:03 AM / 10 months ago

Tokyo shares hit 10-mth high on weaker yen; chip-related stocks shine

SYDNEY, Oct 16 (Reuters) - Japanese shares rallied to more than 10-month highs on Wednesday as a weaker yen lifted bluechip exporters, while chipmaking-related stocks advanced, taking their cue from Wall Street peers.

The benchmark Nikkei share average climbed 1.2% to 22,472.92, its highest close since Dec. 3, having gaided 1.9% gains on Tuesday. The broader Topix rose 0.7% to 1,631.51, also closing at its highest in more than 10 months.

Overnight, the Japanese yen hit a 2-1/2 month low of 108.90 yen against the greenback as investors flocked to riskier assets on hopes of an orderly British exit from the European Union.

Officials and diplomats involved in negotiations over the acrimonious divorce between the world’s fifth-largest economy and its biggest trading bloc said that differences over the terms of the split had narrowed significantly.

Yen-sensitive auto and car parts makers were in demand, with Toyota Motor Co and Nissan Motor rising 1.0% and 1.2%, respectively, while Bridgestone gained 1.6%.

Among other blue-chip exporters, NIDEC advanced 2.2%, Mitsubishi Electric climbed 2.7% and Omron added 2.0%.

Chipmaking-related firms received a boost after the U.S. Philadelphia semiconductor index hit a record high and NVIDIA soared 5.3% on Tuesday.

In Tokyo, Advantest rose 2.7%, Screen Holdings jumped 2.9% and Tokyo Electron added 1.4%.

“Apparently some investors are buying tech and machinery stocks in fear of being left behind the curve, without waiting for upcoming earnings results of those companies to confirm their optimism,” said Yasuo Sakuma, chief investment officer at Libra Investments.

Elsewhere, Unizo Holdings surged 5.4% after private equity firm Blackstone ratcheted up its pursuit of the Japanese hotel operator by launching a 5,000-yen-per-share tender offer.

Bucking the firm broader trend, East Japan Railway fell 1.2% after the company said it would take at least a couple of weeks to fully repair damage caused by Typhoon Hagibis to its Hokuriku bullet train line.

Japan’s start-up markets also fared worse, with the Mothers index shedding 1.0% to a 1-1/2 month closing low of 836.40. (Reporting by Tomo Uetake; Editing by Jacqueline Wong & Simon Cameron-Moore)

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