Japan's Nikkei average rose 1.9 percent to a three-month closing high on Tuesday as a weaker yen lifted exporters, while Isuzu Motors jumped on a report that the truck maker wants to develop new 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 percent.
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. "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.
In moderate trade, the benchmark Nikkei gained 194.56 points to 10,378.03, its highest finish since September 24. It started the day well above 10,200, around which is the top of the cloud on Ichimoku charts comes in and gained steadily, mostly in line with a rise in the dollar which struck a seven-week high against the yen, supported by year-end unwinding of short positions in the greenback.
The broader Topix advanced 1.3 percent to 903.06. 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." Tokyo Electron Ltd, the world's No 2 semiconductor equipment maker, climbed 3.8 percent to 5,730 yen and chip-tester maker Advantest Corp shot up 4.5 percent to 2,335 yen. Sony Corp rose 2.7 percent to 2,650 yen.
High-tech shares had also advanced the previous day following solid quarterly results from Oracle and BlackBerry maker Research In Motion. Toshiba Corp climbed 4.7 percent to 518 yen, while DRAM chipmaker Elpida gained 4.6 percent to 1,387 yen. Toyota Motor rose 2.2 percent 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 surged 6.8 percent to 172 yen after Isuzu President Susumu Hosoi was quoted by the Nikkei business daily as saying in an interview that the truck maker is sounding out General Motors 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 soared 26.7 percent to 114 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 3.7 percent to 676 yen. Some 2.2 billion shares changed hands on the Tokyo exchange's first section, roughly in line with last week's daily average. Advancing shares outnumbered declining ones by 2 to 1.