Japan's Nikkei bounced to a one-week high on Wednesday as chip-related stocks surged in line with their US counterparts, while attention remained on first-half earnings results from the likes of Sony and Nintendo.

The Nikkei share average gained 1.6 per cent to 21,810.47 in midmorning trade, the highest level since October 24. Chip equipment makers jumped, after the Philadelphia SE Semiconductor index surged 4.2 per cent overnight and helped US chip shares outperform.

Tokyo Electron rallied 2.7 per cent and Advantest Corp , which raised its full-year operating profit forecast by 45 per cent to ¥53 billion, jumped 20 per cent. Sony Corp surged 7 per cent after the company boosted its annual profit outlook by 30 per cent to a record level after a strong second-quarter, propelled by popular game titles like “ Marvel's Spider-Man ” as well as growing demand for its online gaming services.

Analysts said investors are taking heart from strong forecasts from Japanese manufacturers, easing worries about a hit to earnings from the heated US-China trade dispute. “The market is relieved that companies seem to take those worries in their stride for now,” said Isao Kubo, an equity strategist at Nissay Asset Management.

But he added that there is still big uncertainty hanging over companies' future growth while there are signs that China's demand is falling.

Wednesday's gainers included Honda Motor Co , which jumped 5 per cent after it raised its annual operating profit forecast by 11.3 per cent to ¥790 billion ($7.0 billion) for the year ending in March 2019 thanks to a weak yen and strong sales of its motorcycles.

Meanwhile, Nintendo Co defied the broader rally, dropping more than 3 per cent after it disappointed the market with a profit that undershot market expectations.

Nintendo's operating profit for the July-September period jumped 30 per cent to ¥30.9 billion yen thanks to strong Switch hardware and games sales, posting the highest quarterly profit since the second quarter of the year ending March 2011. But it fell shy of the ¥36.6 billion average of estimates of seven analysts, according to Refinitiv data.

The broader Topix rose 1.4 per cent to 1,633.88.

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