Japan's chip stocks lift Nikkei to seventh straight weekly gain


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    By Kevin Buckland
       TOKYO, May 26 (Reuters) - Japan's Nikkei share average
rose on Friday, supported by gains in chip stocks as U.S. peer
Nvidia's strong earnings and subsequent share surge continued to
lift the sector.
    The benchmark index  .N225  ended the day up 0.37% at
30,916.31, gaining for a seventh straight week, the longest
streak in five years.
    However, the Nikkei finished well off its highs of the day,
fading in the afternoon after entering the midday recess up 1%.
    The broader Topix erased its earlier 0.6% rally to end the
day flat at 2,145.84, snapping a six-week string of gains.
    Japanese stocks have witnessed a volatile week after both
indexes surged to post-1990 peaks on Tuesday, followed by sharp
    "Some technical indicators are still flashing overbought
signals. So above 31,000, it is easy to think the Nikkei will
invite profit taking," said Maki Sawada, a strategist at Nomura
    At the same time, "at these elevated levels for the Nikkei,
there are people who want to buy but can't, so when there are
dips in shares, they jump on those," she added.
    A popular technical indicator, known as the 14-day relative
strength index (RSI), has remained above the 70-mark indicating
an overheated market all week. It remains around 75 on a scale
of 100.
    On individual stocks, the Nikkei's performance was very
mixed. Seventy of its 225 components rose, while 153 fell, with
two ending flat.
    Energy was the Nikkei's worst performing sector, dropping
2.45% after crude fell back sharply from a nearly one-month
    Tech was the best performer, climbing 0.52%.
    Chip-making equipment giant Tokyo Electron  8035.T  gained
4.44% and chip-testing machine maker Advantest  6857.T  - which
counts Nvidia among its clients - rose 3.92%, building on
Thursday's 16% surge.
    The two stocks together contributed 128 index points,
exceeding Nikkei's total 115-point advance for the day.

 (Reporting by Kevin Buckland; Editing by Sohini Goswami)

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