Nikkei rises as chips rally before Nvidia earnings; weaker yen supports

By Kevin Buckland

TOKYO, May 28 (Reuters) - Japan's Nikkei share average rose on Wednesday, setting the benchmark index on course for a fourth straight session of gains, with a sharply weaker yen buoying the bourse's heavyweight exporters.

Semiconductor-related shares also got a boost from an overnight rally in their U.S. peers, ahead of earnings from artificial intelligence chip leader Nvidia NVDA.O later on Wednesday.

The Nikkei .N225 added 0.5% to 37,918.86 by the midday recess. It rose to as high as 38,178.73 at one point, but struggled to stay above the psychological 38,000 line.

The broader Topix .TOPX also advanced 0.5%.

While a weaker safe-haven yen amid an improvement in overall market sentiment globally supported the Nikkei in the latest session, "one can't say the foreign-exchange market has stabilized," said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management.

Some additional push is needed to take the Nikkei firmly above 38,000, such as further positive developments in U.S. tariff negotiations, he said.

Tech was the top performing Nikkei sector, with chip-testing equipment maker and Nvidia supplier Advantest 6857.T the biggest gainer in index-point terms, followed by chip-making machinery manufacturer Tokyo Electron 8035.T.

Advantest jumped 2.1%, accounting for 39 points in the Nikkei's 195-point rise, while Tokyo Electron contributed 14 points.

Overnight, the Philadelphia SE semiconductor index .SOX rose 3.4%, outperforming a 2% gain for the S&P 500 .SPX.

Automakers also saw solid gains with the yen JPY=EBS trading at around 144.30 per dollar, down from a one-month peak reached on Tuesday. A weaker yen boosts the value of overseas revenues.

Toyota 7203.T rose 0.4%, and Honda 7267.T jumped 1.7%.

Electronics exporters also benefited, with Sony 6758.T advancing 1.3% and Nintendo 7974.T up 1.6%.