Japan's Nikkei share average rose on Thursday, as chip-related stocks tracked their U.S. peers higher overnight, but prospects for an early rate hike from the Bank of Japan limited gains.
The Nikkei was up 0.47% to 66,424.44 by the midday break, while the broader Topix edged up 0.39% to 4,048.79.
Overnight, the Philadelphia SE Semiconductor index, a reference for the Nikkei, ended up 0.4%. Alphabet said that it expects to spend between $195 billion and $205 billion in capital expenditures, compared with the earlier plan of $180 billion to $190 billion this year.
"Sentiment improved after Alphabet raised its outlook for investments, and U.S. chip stocks inched up," said Shuutarou Yasuda, a market analyst at Tokai Tokyo Intelligence Laboratory.
"On the other hand, bets that the BOJ may raise interest rates early hurt sentiment. Until now, the central bank tried to support the economy while raising rates, but that stance may change, which is negative for stocks led by domestic demand."
In Japan, chip-related shares rose, with Advantest jumping 4.31%. Tokyo Electron rose 0.45% and technology investor SoftBank Group rose 2.09%. Memory maker Kioxia edged up 0.76%.
Bank shares rose as Japanese government bond yields jumped on bets for a rate hike.
Mizuho Financial Group rose 2.9% to become the top percentage gainer on the Nikkei. Sumitomo Mitsui Financial Group and Mitsubishi UFJ Financial Group rose nearly 2% each.
Shares of retailers, which are supported by domestic demand, fell, with Takashimaya, Isetan Mitsukoshi Holdings and Seven & i Holdings declining more than 2% each.
Of some 1,500 stocks trading on the Tokyo Stock Exchange's prime market, 41% rose, 55% fell and 3% traded flat.
