Japan's Nikkei ends at 3-week high as robot makers surge on physical AI bets

(Updates with closing prices) By Junko Fujita TOKYO, Dec 4 (Reuters) - Japan’s Nikkei share average closed at a three-week high on Thursday, extending its rally for a third session, as robot makers led gains on bets that physical AI will fuel growth. The Nikkei (.N225) climbed 2.33% to 51,028.42, its highest close since November 13. The broader Topix (.TOPX) closed at a record high, rising 1.92% to 3,398.21. Robot maker Fanuc (6954.T) jumped 12.98% to top the Nikkei gainers, extending its 18.4% surge this week after announcing a partnership with U.S. chip giant Nvidia (NVDA.O) to develop industrial robots powered by “physical AI”, which integrates artificial intelligence with robotic hardware. “The market focus has shifted to robotics-related shares from chip stocks. This means investors keep looking for new themes,” said Kazuaki Shimada, chief strategist at IwaiCosmo Securities. Fanuc’s peer Yaskawa Electric (6506.T) jumped 11.37%. Earlier this week, Yaskawa also announced a tie-up in physical AI with SoftBank Group (9984.T) . SoftBank Group (9984.T) jumped 9.18%. Nabtesco (6268.T) , another robot maker, jumped 11.28%. Chip-testing equipment maker Advantest (6857.T) slipped 0.77%. “The market is not rising in a broad-based rally these days, but if investors sell some shares, they buy others, which means the money is rotating,” Shimada said. Banks rebounded from the previous session’s declines, with Mitsubishi UFJ Financial Group (8306.T) and Sumitomo Mitsui Financial Group (8316.T) up 1.82% and 1.72%, respectively. Drug maker Sumitomo Pharma (4506.T) fell 4.73% to become the biggest percentage loser on the Nikkei. Of the more than 1,600 stocks trading on the Tokyo Stock Exchange’s (TSE) prime market, 79% rose, 17% fell, and 3% traded flat.