Japan's Nikkei average closed up 0.75 percent on Wednesday, rising for a fourth day after an advance in US blue chips to their highest in three and a half years offset an unexpected drop in Japan's trade surplus. Chip stocks such as Advantest Corp got a boost after Intel Corp rallied in New York due to a brokerage upgrade, while a rebound in Pfizer Inc sent Yamanouchi Pharmaceutical Co Ltd and other drug issues higher.
The Nikkei finished up 83.52 points at 11,209.44, its best close since November 15 and adding to a 1.84 percent rise in the previous three sessions.
The broader TOPIX index was up 0.55 percent at 1,122.47.
"We pretty much owe today's gains to higher US shares," said Hiroshi Fujimoto, a fund manager at Okasan Capital Management.
"A slowdown in Japan's economy has mostly been factored into share prices as the Tokyo market has edged down since June. People are now focusing on the chances of Tokyo stocks playing catch-up with overseas markets," Fujimoto said.
The Dow Jones industrial average gained 0.92 percent to 10,759.43, its highest close since June 2001.
Advantest, the world's largest chip-testing equipment maker, rose 1.66 percent to 8,590 yen, with investors encouraged by gains in Intel, the world's biggest chip maker.
Tokyo Electron Ltd, the world's second-largest maker of chip-manufacturing equipment after Applied Materials Inc, gained 0.65 percent to 6,180 yen.
Underscoring robust chip demand in the medium term, Shin-Etsu Chemical Co, the world's top producer of silicon wafers used to make microchips, said it would invest about 100 billion yen ($960 million) to boost output of 300mm wafers by 67 percent.
Shares in Shin-Etsu closed up 2.22 percent at 4,150 yen.
Pharmaceutical issues reversed their recent slump and ended higher, taking their cue from a bounce-back in Pfizer.
Pfizer rose nearly 3 percent on Tuesday after a study of Alzheimer's patients found its arthritis drug Celebrex carried no increased cardiovascular risk, differing from an earlier finding in cancer patients.
The latest study eased investors' fears that US regulators would force Pfizer to withdraw the drug.
Yamanouchi Pharmaceutical, which holds the Japanese licence for Pfizer's Celebrex, put on 1.32 percent to 3,830 yen, and its planned merger partner, Fujisawa Pharmaceutical Co Ltd, rose 1.32 percent to 2,690 yen.
Mizuho Financial Group Inc, Japan's biggest banking group, gained 1.05 percent to 483,000 yen, extending its gains to an eighth day, and rival Mitsubishi Tokyo Financial Group Inc added 1.53 percent to 997,000 yen.
Shares in Sanyo fell 3.95 percent to 340 yen.
Trading was active, with 1.613 billion shares changing hands, up from Tuesday's 1.40 billion shares. Gainers outnumbered decliners 1,052 to 416.
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