Japanese shares advanced by mid-afternoon on Friday as investors, encouraged by a solid gain in the U.S. Nasdaq Composite <.IXIC>, bought Kyocera Corp <6971.T> and other technology shares. "The strong yen now appears to be interpreted as 'Japan buying' by investors rather than a signal to sell high-tech shares," said Hiroichi Nishi, general manager of equity marketing at Nikko Cordial Securities. Nishi said investors now thought the negative effects of a strong yen could be offset by benefits from Japan's economic recovery. Investors were also confident that Japanese corporations could generate profits by outsourcing production overseas and cutting costs even with a strong yen, Nishi said. The yen was currently trading at around 104 per dollar, not far from a four-year high of 103.40 hit on Wednesday. The Nikkei average <.N225> was up 1.27 percent at 11,831.44 by 0448 GMT. The benchmark rose as high as 11,869.00 on Tuesday, its best intraday level since June 4, 2002. The broader TOPIX index <.TOPX> added 0.99 percent to reach 1,186.62. Electronics component maker Kyocera jumped 3.42 percent to 9,060 yen while its peer Rohm Co <6963.OS> leapt 3.61 percent to 13,500 yen.
Advantest Corp <6857.T> rose 2.19 percent to 8,850 on a report that the company, Japan's top maker of chip testing devices, expected operating profit to double in fiscal 2004/05. Bright spots also included Kanebo Ltd <3102.T>, which shot up 20.47 percent to 153 yen to become the top gainer among the Nikkei's 225 components. Investors cheered a Nihon Keizai Shimbun report on Friday that China's biggest drug maker, Sanjiu Enterprise Group, was interested in buying the drug business of Kanebo. The cosmetics maker is undergoing rehabilitation with the help of a state-backed corporate restructuring body, which last month announced a 366 billion yen ($3.53 billion) bailout. Auto makers also drove higher, brushing off concerns about the strong yen. Nissan Motor Co <7201.T>, Japan's third-biggest car maker, was up 2.1 percent at 1,167 yen, compared with a 1.15 percent rise in the transport equipment subindex <.ITEQP.T>. Industry data on Thursday showing brisk sales in March in the United States also helped Nissan shares. Bigger rival Toyota Motor Corp <7203.T>, whose U.S. sales gained 5.5 percent to a March record of 174,209 units, was up 1.6 percent at 3,800 yen. Another notable winner was Japan's second-biggest bourse, the Osaka Securities Exchange Co (OSE) <8697.OJ>, which rose to 432,000 yen after it made a strong debut on its own Hercules market for startups on Thursday. Shares of the OSE first fetched 382,000 yen a day after ending untraded on Thursday, their first trading day, due to a glut of buyers. The first traded price was about 2.2 times its initial public offering price of 170,000 yen. Tatsuyuki Kawasaki, director of equities trading at Kaneyama Securities, said market players expected U.S. job data due later on Friday to yield a strong showing and that attention was focused on how the dollar/yen exchange rate would react. "If the dollar strengthens against the yen after the data, high-tech shares will be bought. But if the dollar remains where it is or weakens, small and mid-cap shares will be sought," he said. ($1=103.70 yen)////