TOKYO, Jan. 15 (Xinhua) -- Japan's Nikkei Stock average closed up 0.68 percent on Friday as investor appetite for blue chips grew on the back of optimistic U.S. corporate earnings and a quarterly revenue report released from Intel Corp. beat market expectations and boosted demand for domestic server chips.
Japan's key benchmark Nikkei, which also saw gains in the finance, retail and real estate sectors, added 74.42 points from Thursday to 10,982.10, marking its highest close since Oct. 2, 2008.
The broader Topix index of all First Section issues on the Tokyo Stock Exchange was up 7.39 points, or 0.77 percent, to 966.40.
Trading volume this week has been boosted by Japan Airlines Corp. and although the volume on the Tokyo exchange's first section retreated marginally after two days of seven-month highs, foreign investors are showing more interest in a broad range of Japanese issues, analysts indicate, citing the need to rebalance portfolios as one contributing factor.
"In September, October, November there was no interest in Japan, no matter who you talked to," said Shinichi Ichikawa, chief equity strategist at Credit Suisse in Tokyo.
"But this is just rebalancing. People are simply taking very underweight Japan in a more neutral direction."
Other insiders, however, claimed that the increased interest and wide range of buying could be simply attributed to bargain hunting, as not only are prices down, but new money is flowing into Japan this month as January marks the beginning of the business year for many companies.
Japan Airlines Corp., the day's volume leader, closed down 12.5 percent at 7 yen, pairing last Wednesday's record low since the carrier merged with sister airline Japan Air System in 2001. The ailing carrier is expected to file for bankruptcy protection next week as part of a state-led rehabilitation plan.
Japan's No.2 carrier, All Nippon Airways Co. Ltd. also ended the day in negative territory, shedding 1.02 percent to close at 290 yen.
Intel Corp., the world's largest chipmaker, announced fourth-quarter revenue and a better-than-expected profit margin outlook's after the bell on Thursday -- helped by better pricing and demand for server chips, analysts said.
Domestic chipmaker issues rose on the news that demand was growing, with Advantest Corp., the world's largest maker of chip-testing equipment, gaining 2.6 percent to 2,555 yen and semiconductor manufacturer Tokyo Electron rising 2.2 percent to 6,040 yen. TDK Corp. rose 2.6 percent to close at 5,990 yen at the bell on Friday.
Diversified banking issued faired well on hopes of domestic and global economic recovery with megabank Mitsubishi UFJ Financial Group Inc., Japan's largest bank by market value, climbing 3.48 percent to 506 yen and Mizuho Financial Group Inc. rising 3.76 percent to 193 yen. Sumitomo Mitsui Financial Group inc. surged 5.24 percent to close the week at 3,050 yen on Friday.
"Investors are buying back bank shares after having reduced the proportion of the sector in their portfolios," said Yoshihiro Ito, senior strategist at Okasan Asset Management Co. "Strong earnings from companies including Intel boosted confidence, stock prices will continue to go higher."
Some commodity and resource-related issues slumped on Friday however, after oil prices fell for the fifth day running. Nippon Oil Corp. slipped 1.3 percent to 445 yen and Nippon Mining Holdings retreated 1.2 percent to 413 yen. Mitsui Mining and Smelting Co. Ltd. also closed down, shedding 0.38 percent to 260 yen.
Showa Shell Sekiyu KK relinquished 0.4 percent to 753 yen, whilst Show Denko also lost ground, losing 0.51 percent to 193 yen.
Trade was active on the Tokyo exchange's First section, with some 3.1 billion shares changing hands, above last week's daily average of around 2.1 billion shares.
Advancing issues outnumbered declining ones by 795 to 720, with declining sectors being comprised of air transport and commodity and resource-related issues.
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