Japan's Nikkei snaps 6-day losing streak as AI shares rebound

By Junko Fujita

TOKYO, Oct 16 (Reuters) - Japan's Nikkei share average snapped a 6-session losing streak on Friday as AI-related shares rebounded, although gains were limited by caution ahead of corporate earnings reports and US midterm elections.

The Nikkei .N225 rose 1.39% to 65,324.29 after a near 5% drop in the previous session. The index fell 5.37% for the week.

The broader Topix .TOPX rose 1.67% to 4,066 but fell 0.95% for the week.

"The shares rebounded as investors bought back stocks after sharp losses in the previous session... there were no other factors for the gains," said Daisuke Hashizume, senior strategist at Daiwa Securities.

"Market players see little reason to buy shares aggressively ahead of the release of corporate earnings and the US midterm elections next month."

Markets are watching whether the election outcome will affect US President Donald Trump's proposals for $5,000 payouts for US adults and higher military spending, said Hashizume.

In Japan, chip-making equipment maker Tokyo Electron 8035.T rose 2.56%, memory chip maker Kioxia 285A.T gained 3.84% and technology investor SoftBank Group 9984.T rose 1.9%.

Chip-testing equipment maker Advantest 6857.T recouped early losses to end 0.55% higher.

BayCurrent 6532.T surged 17.25% to become the top percentage gainer on the Nikkei after the consulting firm said it would use excess cash for investments and share buybacks.

Banks supported the Topix, with Mitsubishi UFJ Financial Group 8306.T and Mizuho Financial Group 8411.T rising 1.82% and 1.72%, respectively.

Of more than 1,500 stocks trading on the Tokyo Stock Exchange's prime market, 83% rose, 14% fell and 2% traded flat.