Global Market: Japan stocks rebound on Wall Street boost, SoftBank rally

Japan's Nikkei share average rose on Friday, snapping a four-session losing streak, as a sharp rally in SoftBank Group and gains on Wall Street helped lift investor sentiment. However, the benchmark remained on track for a weekly decline, Reuters reported.

The Nikkei climbed 0.86% to 64,769.74 by the midday break but was down 2.46% for the week. The broader Topix slipped 0.18% to 4,094.48 and was headed for a 1.26% weekly decline.

According to Reuters, SoftBank Group was the biggest contributor to the Nikkei's advance, surging 10.28% after its chip-design unit Arm Holdings gained 3.29% overnight. Memory chipmaker Kioxia also rose 4.94%, adding to the technology sector's strength.

The gains came after Wall Street ended sharply higher in the previous session as investors reduced expectations for further US interest-rate increases. Federal Reserve Governor Christopher Waller indicated that he would support keeping rates unchanged this month if upcoming data confirmed that inflationary pressures were easing.

However, Japanese equities continued to face pressure from expectations of further monetary tightening by the Bank of Japan. Markets have almost fully priced in a rate increase to 1.25% later this month, with another hike expected by January, according to data from money market broker Tokyo Tanshi, Reuters reported.

Japanese government bond yields extended their recent decline on Friday, with the 10-year JGB yield falling 6 basis points to 2.905%. The decline in yields also provided support to SoftBank Group, which relies on leveraged loans for investments, according to Reuters.

Trading houses moved lower after gains in the previous session. The sector came under pressure after Berkshire Hathaway Chief Executive Greg Abel said the company planned to hold its investments in Japanese trading houses for decades. Berkshire holds stakes of more than 10% in Itochu, Marubeni, Mitsubishi, Mitsui and Sumitomo.

Mitsui fell 4.32%, while Mitsubishi declined 3.26%, making them the biggest drags on the Topix. Banks also weakened, with Mitsubishi UFJ Financial Group down 0.32% and Sumitomo Mitsui Financial Group losing 0.95%.

Despite Friday's rebound, the Nikkei remained on course for its third consecutive weekly decline as investors balanced optimism over global equities against expectations for tighter monetary policy in Japan.