Nikkei hits 2-week high on hopes of earnings recovery, chip output hike

TOKYO, April 2 (Reuters) - Japanese shares closed higher on
Friday, with the Nikkei hitting a two-week high, due to 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 ended 1.58% higher at
29,854.00. The broader Topix .TOPX added 0.71% to 1,971.62.
"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 4.0% 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 4.2%, while TDK 676.2 added 4.0%
and Tokyo Electron 8035.T rose 3.0%.
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 4.7%, 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 3.2%, while Suzuki Motor
7269.T rose 3.1%.
Investors rotated out of value shares to growth shares, with
Topix value .TOPGV rising just 0.24%, compared with 1.20%
gains in Topix Growth .TOPXG .
As rise in growth shares tends to lift the Nikkei more than
the Topix, the so-called N-T ratio .NTIDX jumped back, erasing
all losses after the Bank of Japan announced it will stop buying
Nikkei-linked ETFs on March 19.