Advantest leads Japan's Nikkei higher ahead of Nvidia report

By Junko Fujita

Japan's Nikkei share average rose on Wednesday, lifted by gains in Nvidia supplier Advantest, while investors awaited the U.S. chipmaker's outlook due before the Tokyo market opens on Thursday.

The tech-heavy Nikkei NI225 advanced 0.3% to close at 42,520.27. By contrast, the broader Topix TOPIX eased 0.07% to 3,069.74.

"The market is focused on Nvidia's outlook. Its results will probably beat market expectations, but the bar for Nvidia to satisfy the market with its outlook is high," said Shoichi Arisawa, general manager of the investment research department at IwaiCosmo Securities.

"Any comments from the company could also become market-moving cues."

Nvidia NVDA is set to announce its quarterly report later in the day, with the update likely to fuel or dampen Wall Street's rally in AI-related stocks and Japan's Nikkei, which has heavy exposure to chip-related stocks.

Heavyweight Advantest 6857 rallied 4.49% to give the biggest boost to the Nikkei.

Camera maker Nikon 7731 surged 20.74% to 1,746.5 yen, a daily limit high, after Bloomberg reported EssilorLuxottica SA EL, the maker of Ray-Ban sunglasses, was exploring a potential deal to increase its stake in the company.

The market weighed the yen's direction as expectations grew for the Federal Reserve to cut interest rates in September, said Shigetoshi Kamada, general manager at the research department at Tachibana Securities.

"If the Bank of Japan raises its policy rate anytime soon, the yen, which has been trading within a range, could spike. The market is worried about that move," said Kamada.

Most automakers slipped, with Honda 7267 losing 0.48% and Mitsubishi Motors 7211 declining 1.95% after cutting its full-year operating profit forecast by 30%. Meanwhile, Toyota 7203 recovered from early losses to finish 0.21% higher.

Bank shares fell, with Mitsubishi UFJ Financial Group 8306 and Sumitomo Mitsui Financial Group 8316 shedding 0.99% and 0.85%, respectively.