Japanese shares rally on hopes of earnings recovery, chip output hike

TOKYO, April 2 (Reuters) - Japanese shares rallied on
Friday, on hopes of earnings recovery and gains in
semiconductor-related shares as they look to raise their outputs
to deal with a global shortage of chips.
The Nikkei share average .N225 rose 1.13% to 29,720.62,
reaching its highest level in two weeks. The broader Topix
.TOPX added 0.57% to 1,968.76.
"We are entering a phase where the stock market rallies even
as interest rates rise because of strong earnings growth. This
stage will eventually lead to an overheated market but we are
not there yet," said Masayuki Kubota, chief strategist at
Rakuten Securities.
Nippon Electric Glass 5214.T rose 3.9% after the
manufacturer of glass products used for cars and flat panel
displays revised up its earnings outlook, citing stronger
shipments. Semi-conductor related shares continued to lead the market
as the industry looks set to boost manufacturing amid a global
shortage of chips. Advantest 6857.T gained 3.4%, while Tokyo Electron
8035.T rose 2.8% and Screen Holdings 7735.T added 2.7%.
The bullish sentiment was also fuelled by U.S. President Joe
Biden's $2 trillion spending plan that included a call to spend
$50 billion in chip manufacturing and other technology research,
said Fumio Matsumoto, chief strategist at Okasan Securities.
The broader electronic machinery sector also gained, with
Sony Group 6758.T rising 4.3%, while strength in global tech
shares supported Softbank Group 9984.T , which rose 3.6%.
Automakers were another bright spot, drawing additional help
from the yen's decline in recent weeks.
Mazda Motor 7261.T gained 2.7%, while Suzuki Motor
7269.T rose 2.1%.
On the other hand, investors rotated out of value shares,
which had seen sharp recovery in the past couple of months, such
as shippers .ISHIP.T .
Nippon Yusen 9101.T dropped 2.6%, while Mitsui OSK Lines
9104.T lost 1.9%.
Value shares underperformed, with Topix value .TOPGV
rising just 0.15%, compared with 1.0% gains in Topix Growth
.TOPXG .