TOKYO, Oct. 26 (Xinhua) -- Japan's benchmark Nikkei stock index closed higher for the third straight day on Wednesday as weak U.S. economic data raised hopes the U.S. Federal Reserve's hawkish rate hikes may ease, although gains were capped by subpar earnings from some U.S. tech giants.
The 225-issue Nikkei Stock Average gained 181.56 points, or 0.67 percent, from Tuesday to close the day at 27,431.84, marking its highest closing level since Sept. 20.
The broader Topix index, meanwhile, added 11.07 points, or 0.58 percent, to finish at 1,918.21.
Local brokers said investor sentiment was buoyed following the release of data in the United States revealing that the increase in housing prices slowed in August from July.
In addition, they noted that the consumer confidence index falling in October from a month earlier, also supported the view that the Fed may ease its aggressive rate hikes from December, which may narrow the interest rate gap between Japan and the United States.
"Tuesday's economic reading indicated that the U.S. economy is slowing, stirring speculation the Fed may lower the pace of its rate hikes from December," Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co., was quoted as saying.
Other analysts suggested that some investors assumed a wait-and-see approach as earnings season here begins to swing into gear, with worse-than-expected earnings from U.S. tech giants Alphabet Inc. and Microsoft hurting related issues here.
"As Japanese companies are starting to report earnings, many domestic investors and others want to see the results, so they're likely to hold off on aggressive trading," Ryuta Otsuka, a strategist at Toyo Securities, was quoted as saying.
By the close of play, pharmaceutical, precision instrument and service-oriented issues comprised those that gained the most.
The Nikkei's biggest winner was chemical material maker Denka Co. Ltd., which surged 6.4 percent, after reporting solid results along with plans to spin off its cement business to Taiheiyo Cement Corp.
Other issues gained on individual news, with bicycle parts maker Shimano leaping 5.1 percent, after announcing solid earnings for the January-September period.
Similarly, biotechnology firm Takara Bio jumped 6.3 percent, after upwardly revising its earnings outlook for the April-September period on robust sales of its antigen testing kits.
But technology issues capped gains, dragged down by U.S. bellwethers' worse-than-expected earnings.
"Tokyo Electron and others seem to have been affected by Alphabet and Microsoft," Otsuka said. "If hyper-growth stocks are still adjusting, the negative difference in high-tech stocks may well affect the Nikkei share average."
Heavily-weighted chipmaking equipment maker Tokyo Electron slumped 0.7 percent by the close, while chipmaker Renesas Electronics Corp. lost 2.1 percent and Lasertec Corp. slipped 1.1 percent.
Issues that rose outpaced those that fell by 1,218 to 547, while 72 ended the day unchanged.
On the Prime Market on Wednesday, 1,044.71 million shares changed hands, rising from Tuesday's volume of 1,040.08 million shares.
The turnover on the third trading day of the week came to 2,707.06 billion yen (18.36 billion U.S. dollars). ■