Japan's Nikkei share average rose on Friday morning after the European Central Bank announced it would avoid raising rates until mid-2019, but chip-related stocks tumbled after a brokerage slashed the target price of Tokyo Electron.

The market was on mid-day break when the outcome of a Bank of Japan meeting was announced. As widely expected, the BOJ kept its short-term interest rate target at minus 0.1 per cent and a pledge to guide 10-year government bond yields around zero per cent.

The Nikkei gained 0.4 per cent to 22,827.77 at the break. The ECB announced it would end its bond-purchase programme at 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 has risen 0.6 per cent so far. Drugmakers were steady, with Astellas Pharma rising 1.3 per cent and Eisai Co soaring 2.5 per cent. Mining stocks were also bought, with Inpex Corp gaining 0.9 per cent and Japan Petroleum Exploration adding 1.4 per cent.

Semiconductor manufacturing equipment maker Tokyo Electron Ltd stumbled as much as 5.1 per cent to 19,025 yen, the lowest point in four months, after Credit Suisse cut its target price to ¥17,600 from ¥19,700.

The brokerage firm said it expects memory makers to scale back their capex plans, 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 3.6 percent and Shin-Etsu Chemical declining 2.4 percent.

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 2030 percent for all clients. Murata soared 6.2 per cent.

Taiyo Yuden jumped 9.7 per cent after the brokerage raised its target price to ¥4,000 from ¥2,130, citing the same factor. The broader Topix rose 0.3 per cent to 1,788.49.

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