Japan's Nikkei share average rose 0.86 percent on Wednesday as investors bought Tokyo Electron Ltd and other companies with bright profit outlooks with the earnings reporting season shifting into full gear.
Toyota Motor Corp advanced on a newspaper report it plans to boost production by about 12 percent in 2006.
Sharp Corp reversed earlier gains in the closing minutes after posting a lower operating profit in the first half, though it kept its full-year outlook. Its shares ended down 0.8 percent at 1,592 yen.
Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Securities, said judging from high-tech firms' earnings released so far, the tech-sensitive Nikkei may struggle.
The Nikkei gained 114.40 points to 13,395.02. The benchmark rose 1.33 percent on Tuesday, its biggest percentage gain in two weeks.
The broader TOPIX index added 1.01 percent to 1,407.70.
Earnings prospects played a key role in determining winners and losers.
Tokyo Electron, the world's second-biggest maker of chip equipment, added 1.4 percent to 5,840 yen a day after it raised its full-year net profit outlook by more than 20 percent.
A better earnings outlook also lifted Resona Holdings Inc by 1.7 percent to 304,000 yen after it revised up its first-half profit estimate by 54.5 percent on Tuesday.
But Elpida Memory Inc, the world's fifth-largest DRAM chip maker, tumbled 5.4 percent to 3,000 yen on a profit warning.
Shimizu Corp jumped 7.1 percent to 753 yen, extending a 3.1 percent gain from Tuesday, while Kumagai Gumi Co Ltd shot up 7.9 percent to 503 yen to add to Tuesday's 1.7 percent rise.
Shipping stocks drew buyers on chances they will be picked up by a number of stock investment trusts being set up this week.
Mitsui O.S.K. Lines Ltd rose 3.6 percent to 801 yen, Kawasaki Kisen Kaisha Ltd gained 2.8 percent to 725 yen and Nippon Yusen KK advanced 2.1 percent to 694 yen. All have a dividend rate of more than 2 percent.
In the auto sector, Toyota rose 2 percent to 5,210 yen after the Nihon Keizai said on Wednesday that the Toyota group was expected to boost its global car production, making it almost certain the group would surpass General Motors Corp to become the world's top auto maker in terms of output.
After the market closed, Advantest Corp, the world's largest maker of chip-testing equipment, posted a 47.5 percent fall in first-half profit but kept its full-year forecast of a 2.8 percent profit decline. Its shares ended up 2.2 percent at 9,010 yen.
Likewise, Seiko Epson Corp, the world's second-largest ink jet printer maker, said after the close that it fell into the red in the first half on sluggish sales of ink jet printers and small liquid crystal displays, but kept its full-year outlook. It closed up 0.4 percent at 2,865. More earnings announcements are due on Thursday, including Sony Corp, Fujitsu Ltd, Canon Inc, NEC Corp and Honda Motor Co Ltd.
Trade volume hit its highest since last Thursday, with 2.62 billion shares changing hands on the Tokyo exchange's first section. Advancers outnumbered decliners 1,205 to 382.
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