Nikkei closed lower on chip stocks

Japan’s Nikkei closed lower on Thursday, as Tokyo Electron and Advantest led chip-related stock losses after Micron Technology cut memory chip supplies and capital spending, while travel stocks jumped thanks to an increase in foreign tourists.

Micron was the first major chip maker to sound the alarm about falling demand for personal computers and smartphones earlier this year in the face of inflation that hit its highest level in decades.

The Nikkei index fell 0.35 percent to close at 27,930.57 points, while the broader Topix index rose 0.15 percent to 1,966.28 points.

Chipmaking equipment maker Tokyo Electron fell 2.95%, becoming the worst hit on the Nikkei index, while chip testing equipment maker Advantest fell 3.14%.

Micron shares tumbled 6.7% after the semiconductor company said it would reduce supplies of memory chips and make further cuts to its capital spending plan, as it struggles to get rid of excess inventory due to falling demand.

This announcement led to a decline in the information technology sector on the Standard & Poor’s 500 index on Wall Street, 1.4 percent, while the Philadelphia semiconductor index fell 4.3 percent.

Retail stocks and rail operators bucked the trend, jumping after the number of foreign visitors to Japan more than doubled in October from the previous month, as the country fully reopened after two years of anti-COVID-19 restrictions.