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TOKYO: Japan's Nikkei share average rose on Friday after the European Central Bank announced it would avoid raising rates until mid-2019, but chip-related stocks tumbled as a brokerage slashed the target price of Tokyo Electron.
The market had little reaction to the outcome of a Bank of Japan meeting, which kept its short-term interest rate target at minus 0.1 per cent, as widely expected, and a pledge to guide 10-year government bond yields around zero per cent.
Traders said that investors were cautious about a global trade war, as U.S.
President Donald Trump gets ready to impose "pretty significant" tariffs on Chinese goods.
The Nikkei ended 0.5 per cent higher at 22,851.75.
The ECB announced it would end its bond-purchase programme at the year-end but signalled that any interest rate hike was still distant.
"Investors were relieved that there is no imminent tightening in Europe, the day after they were spooked by the U.S.
Federal Reserve's hawkish stance," said Nobuhiko Kuramochi, a strategist at Mizuho Securities.
For the week, the benchmark index rose 0.7 per cent.
Drugmakers were steady, with Astellas Pharma rising 1.6 per cent and Eisai Co soaring 3.0 per cent.
Mining stocks were also bought, with Inpex Corp gaining 1.3 per cent and Japan Petroleum Exploration adding 0.6 per cent.
Semiconductor manufacturing equipment maker Tokyo Electron Ltd stumbled 4.9 per cent to 19,080 yen, after Credit Suisse cut its target price to 17,600 yen from 19,700 yen.
The brokerage firm said it expects memory makers to scale back their plans for capital expenditure, which will likely cause Tokyo Electron's operating profit to miss its guidance in the year ending March 2019.
The downgrade dented sentiment among other chip-related companies, with Advantest Corp shedding 4.2 per cent and Shin-Etsu Chemical declining 3.2 per cent.
Credit Suisse hiked the rating of Murata Manufacturing to 'outperform' from 'neutral', saying that major Japanese MLCC (Multilayer Ceramic Capacitor) makers are pushing for price increases across all products of 20-30 per cent for all clients.
Murata soared 7.0 per cent.
Taiyo Yuden jumped 14 per cent after the brokerage raised its target price to 4,000 yen from 2,130 yen, citing the same factor.
The broader Topix rose 0.3 per cent to 1,789.04.
