Japan's Nikkei rises nearly 2% as AI-linked shares track US semiconductor rally

By Junko Fujita

TOKYO, Sept 30 (Reuters) - Japan's Nikkei share average rose nearly 2% on Wednesday, with AI-linked stocks tracking gains in US semiconductor firms, while lower oil prices overnight lifted economy-sensitive stocks.

The Nikkei .N225 closed 1.94% higher at 66,753.72, after briefly rising more than 2%.

The broader Topix .TOPX climbed 1.67% to 4,108.65.

Overnight, the Philadelphia Semiconductor Index .SOX advanced 1.3% despite US stocks ending slightly lower as Treasury yields continued to climb ahead of inflation and labour market data.

"The Nikkei rises when the US semiconductor index rises, even as overall US market declines, and this is the latest trend in the market," said Kazuaki Shimada, chief strategist at IwaiCosmo Securities.

Technology investor SoftBank Group 9984.T rose 6.55%, while chip-linked shares Tokyo Electron 8035.T and Advantest 6857.T gained 2.69% and 1.03%, respectively.

Fibre-optic cable maker Fujikura 5803.T climbed 5.94%.

Taiyo Yuden 6976.T, a manufacturer of multi-layer ceramic capacitors to regulate power in AI servers, gained 2.27% after the company said it would form a business alliance with electronic parts maker TDK 6762.T. Shares of TDK climbed 2.12%.

Peer Murata Manufacturing 6981.T fell 2.94%.

Value shares rose, helping to recoup losses on the indexes after a majority of shares went ex-dividend following Monday's deadline to secure the right to mid-term dividend payouts.

"This shows the strength of the market fundamentals," Shimada said.

Banking shares rose, with Mizuho Financial Group 8411.T jumping 4.52%. Sumitomo Mitsui Financial Group 8316.T and Mitsubishi UFJ Financial 8306.T rose more than 3% each.

Of more than 1,500 stocks trading on the Tokyo Stock Exchange's prime market, 72% rose, 23% fell and 3% traded flat.