TOKYO: Japan’s ‌Nikkei share average rose on Wednesday as AI enthusiasm crept back into the market, overriding concerns about escalation ​in the Middle East crisis.

The benchmark Nikkei 225 advanced 0.43% to 65,549.88, recovering from an early slide. The broader Topix rose 0.24% to 4,059.87.

Business confidence among big Japanese manufacturers climbed in September to its highest level since December 2021, buoyed by robust semiconductor and data-centre-related ‌demand, a Reuters monthly ‌poll showed on Wednesday.

While ​the ‌U.S. ⁠market ​was weighed ⁠down overnight by concerns over the Iran war and rising oil prices, the Philadelphia SE Semiconductor Index still posted a 1.3% gain.

News that Verizon signed a multi-billion-dollar deal with Corning to supply high-density optical fibre for AI infrastructure boosted Japanese ⁠cable makers such as Fujikura , ‌said Maki Sawada, an ‌equities strategist at Nomura Securities.

“Semiconductor and ​AI-related shares are ‌performing strongly, lending a positive contribution to the ‌Nikkei 225,” Sawada said.

Japanese equities also contended with a stronger yen, holding near a seven-month high on expectations of accelerated rate hikes by the Bank of Japan ‌as soon as next week’s meeting.

“As the market appears to have largely ⁠priced ⁠in the yen’s appreciation, the trend is expected to shift toward buying on dips once the initial selling subsides,” Sony Financial Group analysts said in a note.

There were 109 advancers on the Nikkei 225 against 116 decliners.

The largest percentage gainers in the index were Furukawa Electric, up 13.20%, followed by Fujikura, 8.75% higher, and Lasertec, which gained 6.56%.

The largest losers were Kyowa ​Kirin, down 5.12%, followed ​by Sumitomo Pharma, 5.02% lower, and Nikon , which lost 3.63%.

REUTERS