TOKYO: Japan's Nikkei average hit its highest in eight weeks on Tuesday as a weaker yen lifted exporters, while Isuzu Motors jumped after a report that the automaker seeks to develop next-generation diesel engines for General Motors.
Chip-related stocks got a boost after the Nikkei business daily reported Toshiba Corp and partner Sandisk Corp would jointly invest 150 billion yen ($1.7 billion) to boost their venture's production capacity by about 40 per cent.
"The market is being driven higher by gains in high-tech stocks on the back of the weaker yen and overseas news," said Hajime Nakajima, deputy general manager at Cosmo Securities. Shares of high-tech exporters also gained after the tech-heavy Nasdaq hit a 15-month high following a brokerage upgrade on Intel Corp, citing solid "end-market" conditions.
"But the Nikkei will likely lose upward momentum as it rebounds toward 10,500, with investors wanting to sell around that level for now," Nakajima said.
The benchmark Nikkei was up 1.4 per cent at 10,326.23 by midafternoon, after rising as high as 10,332.70, its highest level since October 26. The broader Topix added 1.2 per cent to 902.12.
The dollar struck a seven-week high against the yen in Asian trade, supported by year-end unwinding of short positions in the greenback. Analysts said the Nikkei's rise to hold well above 10,200 -- a level it has failed to maintain in recent sessions -- boded well for trade for at least the rest of this year.
"The Nikkei is likely to climb to 10,500 before the year ends," said Mitsushige Akino, chief fund manager of Ichiyoshi Investment Management.
"But whether the market will extend gains next year is still a bit doubtful, given the fact that it is mostly retail investors chasing short-term profits behind today's rally."
High techs shine
Tokyo Electron Ltd, the world's No.2 semiconductor equipment maker, climbed 2.7 per cent to 5,670 yen and chip-tester maker Advantest Corp gained 2.7 per cent to 2,295 yen. Sony Corp rose 2.5 per cent to 2,645 yen. High-tech shares had also advanced the previous day following solid quarterly results from Oracle and BlackBerry maker Research In Motion.
Toshiba Corp jumped 4.2 per cent to 516 yen, while DRAM chipmaker Elpida climbed 4.4 per cent to 1,384 yen. Toyota Motor rose 2.2 per cent to 3,800 yen after media said the world's biggest automaker plans to cut car parts procurement costs by around 30 percent over three years to help it regain profitability.
Isuzu shot up 6.8 per cent to 172 yen after Isuzu President Susumu Hosoi was quoted by the Nikkei business daily as saying in an interview that the automaker is sounding out General Motors Co on a proposal to design and develop next-generation diesel engines for the US partner.
The move eyes tougher regulations on fuel efficiency and emissions that will likely be put in place in the United States and Europe, the paper said. SPC Electronics surged 24.4 percent to 112 yen after Mitsubishi Electric Corp said on Monday it was planning to make SPC a fully owned subsidiary by allocating 0.17 Mitsubishi share for each SPC share. Mitsubishi Electric advanced 3.4 per cent to 674 yen.
