(Adds analyst comment in paragraph 4, updates with closing
prices)
By Junko Fujita
TOKYO, June 29 (Reuters) - Japan's Nikkei share average
reversed course to end higher on Monday, as chip-related stocks
cut losses after South Korea rolled out sweeping chip and AI
mega-projects.
The Nikkei closed 0.15% higher at 69,468.11, after
falling as much as 1.97% earlier in the session. The broader
Topix rose 0.47% to 3,982.
South Korean President Lee Jae Myung said the world's two
largest memory chipmakers, Samsung Electronics ( SSNLF ) and
SK Hynix, would invest some $520 billion with
suppliers to build two new chip fabrication sites in the
country.
"What pushed the Nikkei lower were chip-related shares, and
what made the Nikkei reverse the loss were also chip-related
shares," said Kazuaki Shimada, chief strategist at IwaiCosmo
Securities.
Memory chipmaker Kioxia ( KXHCF ) narrowed its early loss,
ending 4.5% lower. Chip-testing equipment maker Advantest ( ADTTF )
fell 1.51%. Chip-making equipment maker Tokyo Electron ( TOELF )
rose 2.44%.
Those shares declined in early trade after the Philadelphia
SE semiconductor index's 5.3% fall on Friday. The decline
underscores recent volatility among AI-related chipmakers that
have fuelled much of Wall Street's gains in recent years.
On Monday, investors rotated out of AI-related stocks to
beaten-down shares, said Shuutarou Yasuda, a market analyst at
Tokai Tokyo Intelligence Laboratory.
"There was a concern in the market that memory chip prices
have risen too much," he said.
Game maker Nintendo ( NTDOF ), whose profits have been
squeezed by rising memory chip prices, jumped 5.25%, while Sony
Group ( SONY ) rose 3.13%.
The fragility of the U.S.-Iran interim peace deal has not
become a market-moving cue in Japan, said Yasuda.
Energy-related shares, which typically react positively to
war tensions, fell on Monday.
The mining sector lost 1.83% and oil refiners
fell 1.07%.
Of the more than 1,500 stocks trading on the Tokyo Stock
Exchange's prime market, 69% rose, 26% fell and 2% traded flat.