Japan's Nikkei gives up gains on caution for Micron earnings

By Reuters News

By Junko Fujita

- Japan's Nikkei share average surrendered early gains to trade slightly lower on Monday, weighed down by declines in Nasdaq futures ahead of earnings for US memory chipmaker Micron Technology later in the week.

The Nikkei .N225 ended the morning session 0.05% lower at 66,333.53, after rising as much as 1% to hit 67,034.74 earlier in the session, its highest level since mid-August.

The index is set to end a five-session winning run if this momentum holds.

The broader Topix .TOPX inched up 0.16% to 4,135.38.

Investors sold stocks as they saw the Nasdaq futures weakening in Asian hours ahead of Micron Technology's MU.O quarterly results due on Wednesday, said Takamasa Ikeda, senior portfolio manager at GCI Asset Management.

Market players also sold stocks to rebalance their positions at the end of the first half of the year, he said.

"The US semiconductor index .SOX has been trading within a box range since June 20. The range is rather wide, and it will trade within the box in the next three to four months," said Ikeda, adding that the Nikkei will also mirror the move.

On Friday, the SOX index rose 1.4%, supported by rallying AI stocks. .N

In Japan, technology investor SoftBank Group 9984.T rose 2.28% and chip-testing equipment maker Advantest 6857.T edged up 0.26%.

Chip-making equipment maker Tokyo Electron 8035.T slipped 0.19% and memory maker Kioxia Holdings 285A.T fell 2.33%.

Ibiden 4062.T, a central processing unit component maker, lost 4.8%.

Bank shares rose to support the Topix's gain. Mitsubishi UFJ Financial Group 8306.T and Sumitomo Mitsui Financial Group 8316.T rose 0.24% and 1.27%, respectively.

Technology stocks and bank shares will be the two main supports for Japanese stocks, but when the Bank of Japan's policy rate rises closer to the terminal rate, bank shares may lose their ground, Ikeda said.

Out of 225 components on the Nikkei index, 113 stocks rose, 109 fell and 3 traded flat.

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