Nikkei rises on tech shares tracking US peers, Fast Retailing weighs

Nikkei share average: Japan's Nikkei share average edged higher on Friday as technology stocks mirrored the strength of their US counterparts overnight, although a downturn in Uniqlo-parent Fast Retailing limited gains.

The Nikkei climbed by 0.51 per cent to 39,642.66 by the midday break, poised to mark a 1.67 per cent increase for the week.

The broader Topix also saw gains, rising by 0.62 per cent to 2,764.02, potentially setting up for a weekly rise of 2.28 per cent.

Shigetoshi Kamada, the general manager at Tachibana Securities' research department, noted, "The Nasdaq was strong overnight despite the rise in US Treasury yields, which gave confidence to investors."

US stocks experienced a robust uptick on Thursday, led by tech-related momentum stocks, with softer-than-expected Producer Prices index data renewing hopes of a cooling trend in inflation, following a strong inflation reading the day prior.

However, Treasury yields continued their ascent as hotter-than-anticipated Consumer Price index data raised doubts about the Federal Reserve's ability to lower rates this year.

Japanese chip-related stocks saw gains, with Tokyo Electron and Lasertec rising by 1.46 per cent and 3.26 per cent, respectively. Technology investor SoftBank Group also gained 0.47 per cent.

Property developer Mitsui Fudosan surged by 8.24 per cent following announcements regarding shareholder returns, including plans for a 40 billion yen ($261.22 million) share buyback.

In response, peers like Tokyo Tatemono and Mitsubishi Estate saw significant jumps of 8.44 per cent and 7.94 per cent, respectively.

The property index (.IRLTY.T) advanced by 5.7 per cent, leading among the Tokyo Stock Exchange's 33 industry sub-indexes.

Kamada highlighted, "As we approach the corporate earnings season, the market expects shareholder returns from more cash-rich firms. Mitsui Fudosan raised those expectations."

However, Fast Retailing witnessed a decline of 3.63 per cent after the owner of the Uniqlo brand maintained its full-year operating profit forecast unchanged.

Fast Retailing emerged as the biggest drag on the Nikkei, erasing 175.55 points. Despite this setback, the index gained 200 points in the morning session.

Out of the index's 225 components, 162 experienced gains, 60 saw declines, with three remaining flat.

(With Reuters inputs.)