Japan’s Nikkei Hits a Two-Week High on Hopes of a Recovery in Corporate Earnings

Japanese shares closed higher on Friday, while the Nikkei index reached a two-week high, on hopes of recovering corporate earnings and gains in semiconductor stocks as companies appear to be ramping up production to address a global chip shortage.

The Nikkei rose 1.58% to close at 29,854 points. The broader Topix index added 0.71 percent to 1971.62 points.

Nippon Electric Glass rose 4 percent after the maker of glass products used in cars and flat screens revised up its profit forecast, citing larger shipments.

Semiconductor stocks continued to lead the market as the sector appeared to be boosting production amid a global chip shortage.

Advantest gained 4.2%, TDK added 4% and Tokyo Electron rose 3%.

Fumio Matsumoto, chief strategist at Okasan Securities, said positive sentiment had also received a boost from US President Joe Biden’s $ 2 trillion spending plan that includes a call for $ 50 billion to spend on chip manufacturing and other technology research.

The broader electronic machinery sector also gained, as Sony Group rose 4.7 percent, while SoftBank Group received support from the rise in global technology shares, increasing its share by 3.6 percent.

Auto makers have also been a bright spot, as they have received additional help from the weakening of the yen in recent weeks.

Mazda Motor gained 3.2 percent, while Suzuki Motor gained 3.1 percent