Japan’s Nikkei stock average rose slightly during Tuesday’s morning session as investors favored value stocks over semiconductor and other high-tech stocks, while a weakening yen continued to support values linked to export.
The Nikkei was up 0.51% at 39,001.39 at midday, while the broader Topix climbed 1.44% to 2,779.59.
US semiconductor giant Nvidia fell for the third time on Monday, while the chip stock index ended 3.02% lower, dampening investor sentiment towards stocks linked to the artificial intelligence and chips during trading hours in Asia.
Shares of Disco Corp fell 5.3% to be the biggest percentage losers, and Tokyo Electron fell 2.5% to take 86 points off the benchmark index.
SoftBank Group, an investor in artificial intelligence-focused start-ups, slipped 1.7% to become the second biggest loser.
But a weaker yen continued to support export-related stocks that tend to benefit from a soft domestic currency, which hovered near a 34-year low of 160.245 per dollar.
At the same time, investors favored yield stocks over growth stocks, generating broad-based gains across the financial sector, which contributed to the Nikkei’s rise.
Banks rose 3.5% to lead the sector’s gains, closely followed by insurance companies and securities firms, both up about 3.3%.
“The Nikkei is a more value-oriented market, and investors could rebalance as the end of the quarter approaches to gain exposure to the weaker part of the market,” said Charu Chanana, global market strategist and head of foreign exchange strategy at Saxo.
“A selective, bottom-up approach to Japanese stocks could be interesting from now on, as risks of yen appreciation intensify in the second half of the year.”
Among financial stocks, Daiwa Securities Group jumped 4.2%, Mitsubishi UFJ Financial Group gained 4.1% and Resona Holdings rose about 4%.
Shares of Mizuho Financial Group rose 3.7%.
Among other individual stocks, the automaker and index heavyweight, Toyota Motor, rose 3.8%. (Reporting by Brigid Riley; Editing by Mrigank Dhaniwala)
