Tokyo stocks closed higher for a fourth day on Wednesday as a sunny outlook for chip demand lifted large-cap shares such as Advantest and healthy earnings results from Hitachi spurred buying of other tech shares in the last hour of trading.
The market was also supported by data showing Japan's industrial production rose 3.0 percent in September from August, beating the forecast of a 1.5 percent rise.
"Industrial output was a pleasant surprise and high-tech shares performed well despite the yen nearly breaking below the 108 yen level" against the dollar, said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management Co Ltd.
"The market is now trying to price in the improving Japanese economy," he added.
The Nikkei average rose 1.69 percent to 10,739.22, after climbing by as much as two percent earlier.
The broad-based TOPIX index was up 1.14 percent at 1,057.14, with buying seen across the board.
Electronics conglomerate Hitachi Ltd said its half-year pre-tax profit more than doubled, helped by spending on heavy machinery and improving demand for its hard disk drives (HDDs).
The strong results, which came out during the last hour of trading, pushed Hitachi shares higher to close up 7.64 percent at 690 yen.
Fujitsu Ltd was up 7.29 percent at 721 yen after it posted a narrower quarterly loss on Wednesday from a year earlier, citing booming demand for flat-panel televisions.
More good news came out after the market closed, as Sharp Corp reported a higher net profit for the six months to September and Sanyo Electric Co said its half-year group net profit nearly tripled.
Sanyo closed up 3.61 percent at 516 yen while Sharp ended up 3.11 percent at 1,789 yen.
Yutaka Shiraki, a senior equity strategist at Mitsubishi Securities, said that although technology shares overall performed well on Wednesday, investors would start to sort out the winners and losers based on earnings results.
"Unlike before, when profits simply went up as the economy picked up, it's not easy to generate profits without making any effort," he said.
Toshiba Corp, which last week cut its net profit forecast, eked out a 0.87 percent gain to close at 464 yen, while Kyocera Corp was up 1.21 percent at 6,690 yen after posting an eight percent drop in its first-half net profit on Tuesday.
Both shares underperformed the electronics machinery index IELEC, which rose 3.46 percent to 1,701.32.
Advantest Corp, Japan's biggest maker of microchip testing devices, ended up 5.11 percent at 8,230 yen, after an industry group raised its 2003 forecast for worldwide chip sales and predicted even stronger growth in 2004.
Trade volume picked up with 1.23 billion shares changing hands, breaking above one billion shares for the first time since Friday. Advancers outpaced decliners, 1,058 to 361.
BANKS DOWN BEFORE U.S. GDP While the market closed on a relatively positive note, bank shares erased earlier gains as some investors locked in profit ahead of the U.S. government's initial estimate of third-quarter gross domestic product on Thursday.
The data is expected to underscore assumptions that the U.S. economy is on the rebound, as economists have predicted the nation's GDP rose six percent following a 3.3 percent rise in the second quarter.
Mizuho Financial Group Inc was down 1.72 percent at 286,000 yen, giving up earlier gains of more than five percent.
UFJ Holdings Inc also fell one percent to 497,000 yen, after rising 10.82 percent on Tuesday as the bank upped its group net profit forecast for April-September.
Other losers included NTT DoCoMo Inc, which fell 3.6 percent to 241,000 yen after sources close to the company said it was likely to post a year-on-year fall in half-year group operating profit.
It would be the first year-on-year drop in DoCoMo's operating profit since its listing on the stock market in 1998.
Tetsuya Ishijima, senior investment strategist at Okasan Securities Co Ltd, said Japan's largest mobile operator may come under investor scrutiny unless it comes up with specific business plans.
"The fact that DoCoMo shares fell means that the company has not put out clear business strategies when competition is intensifying," he said.
Ishijima also said the Nikkei should be ready to test higher levels later this week or next week, after digesting a slew of earnings reports and economic data.
"I believe the market already bottomed out last week," during which the Nikkei fell 6.36 percent, he said.
The market was also supported by data showing Japan's industrial production rose 3.0 percent in September from August, beating the forecast of a 1.5 percent rise.
"Industrial output was a pleasant surprise and high-tech shares performed well despite the yen nearly breaking below the 108 yen level" against the dollar, said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management Co Ltd.
"The market is now trying to price in the improving Japanese economy," he added.
The Nikkei average rose 1.69 percent to 10,739.22, after climbing by as much as two percent earlier.
The broad-based TOPIX index was up 1.14 percent at 1,057.14, with buying seen across the board.
Electronics conglomerate Hitachi Ltd said its half-year pre-tax profit more than doubled, helped by spending on heavy machinery and improving demand for its hard disk drives (HDDs).
The strong results, which came out during the last hour of trading, pushed Hitachi shares higher to close up 7.64 percent at 690 yen.
Fujitsu Ltd was up 7.29 percent at 721 yen after it posted a narrower quarterly loss on Wednesday from a year earlier, citing booming demand for flat-panel televisions.
More good news came out after the market closed, as Sharp Corp reported a higher net profit for the six months to September and Sanyo Electric Co said its half-year group net profit nearly tripled.
Sanyo closed up 3.61 percent at 516 yen while Sharp ended up 3.11 percent at 1,789 yen.
Yutaka Shiraki, a senior equity strategist at Mitsubishi Securities, said that although technology shares overall performed well on Wednesday, investors would start to sort out the winners and losers based on earnings results.
"Unlike before, when profits simply went up as the economy picked up, it's not easy to generate profits without making any effort," he said.
Toshiba Corp, which last week cut its net profit forecast, eked out a 0.87 percent gain to close at 464 yen, while Kyocera Corp was up 1.21 percent at 6,690 yen after posting an eight percent drop in its first-half net profit on Tuesday.
Both shares underperformed the electronics machinery index IELEC, which rose 3.46 percent to 1,701.32.
Advantest Corp, Japan's biggest maker of microchip testing devices, ended up 5.11 percent at 8,230 yen, after an industry group raised its 2003 forecast for worldwide chip sales and predicted even stronger growth in 2004.
Trade volume picked up with 1.23 billion shares changing hands, breaking above one billion shares for the first time since Friday. Advancers outpaced decliners, 1,058 to 361.
BANKS DOWN BEFORE U.S. GDP While the market closed on a relatively positive note, bank shares erased earlier gains as some investors locked in profit ahead of the U.S. government's initial estimate of third-quarter gross domestic product on Thursday.
The data is expected to underscore assumptions that the U.S. economy is on the rebound, as economists have predicted the nation's GDP rose six percent following a 3.3 percent rise in the second quarter.
Mizuho Financial Group Inc was down 1.72 percent at 286,000 yen, giving up earlier gains of more than five percent.
UFJ Holdings Inc also fell one percent to 497,000 yen, after rising 10.82 percent on Tuesday as the bank upped its group net profit forecast for April-September.
Other losers included NTT DoCoMo Inc, which fell 3.6 percent to 241,000 yen after sources close to the company said it was likely to post a year-on-year fall in half-year group operating profit.
It would be the first year-on-year drop in DoCoMo's operating profit since its listing on the stock market in 1998.
Tetsuya Ishijima, senior investment strategist at Okasan Securities Co Ltd, said Japan's largest mobile operator may come under investor scrutiny unless it comes up with specific business plans.
"The fact that DoCoMo shares fell means that the company has not put out clear business strategies when competition is intensifying," he said.
Ishijima also said the Nikkei should be ready to test higher levels later this week or next week, after digesting a slew of earnings reports and economic data.
"I believe the market already bottomed out last week," during which the Nikkei fell 6.36 percent, he said.
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