Japan's Nikkei ends higher as Nvidia outlook, Buffett stake lift sentiment

By Junko Fujita

TOKYO, Aug 28 (Reuters) - Japan's Nikkei share average ended higher on Thursday, supported by AI chipmaker Nvidia's strong quarterly outlook and renewed trader confidence after billionaire investor Warren Buffett increased his investments in the country.

The Nikkei recovered from early losses to close 0.7% higher at 42,828.79. The broader Topix .TOPX also ended up 0.7%.

Nvidia shares are a key driver of Japan's Nikkei, which is heavily weighted toward chip-related stocks.

U.S.-based chipmaker Nvidia NVDA.O forecast third-quarter revenue above market estimates on Wednesday, helped by robust demand for its AI chips, but the stock fell 3% in after-hours trading as its on-hold China business remained uncertain.

"The main focus is Nvidia. The market is waiting to see how the shares will perform on Wall Street later in the day," said Takamasa Ikeda, senior portfolio manager at GCI Asset Management.

The Nikkei index opened lower on Thursday but recouped losses as chip-testing equipment maker and Nvidia supplier Advantest 6857.T rebounded, closing up 1.5% after an earlier drop of 3.6%.

The benchmark index turned higher in the afternoon after trading house Mitsubishi Corp 8058.T said Buffett's National Indemnity Company raised its stake to 10.23% from 9.74%. The U.S. investor had previously raised its holdings in five major Japanese trading houses, including Mitsubishi, in March.

Mitsubishi's stock gained nearly 2% while rival Mitsui & Co. 8031.T rose 1.2%.

Technology investor SoftBank Group 9984.T rose 3.2%, contributing the biggest boost to the Nikkei. Shares of chip-making equipment maker Tokyo Electron 8035.T ended 2% higher.

Cable maker Fujikura 5803.T, a gauge for investments in data centre sector, jumped 5.5%.

Sompo Holdings 8630.T jumped 3.3% after the Japanese insurer said it would acquire New York-listed Aspen Insurance Holdings AHL.N for about $3.5 billion.

Energy explorers .IMING.T rose 4% to become the top performers among the Tokyo Stock Exchange's (TSE) 33 industry sub-indexes.