TOPIX hits 8-mth high as Advantest, chip stocks up

Tokyo, Jan 16: Japan's broad TOPIX index rose to its highestin eight months on Tuesday, gaining 0.20 percent as shares of AdvantestCorp and other microchip-related stocks rose on expectations of stronggrowth.

Gains were limited however, as investors looked ahead to the outcome of a Bank of Japan policy meeting later this week.

''Makers of chip-building equipment are gaining because theirearnings have been strong,'' said Katsuhiko Kodama, senior strategistat Toyo Securities.

''I think tech stocks are likely to be the focus among blue chipsthis year.... While their stock prices are relatively high at themoment, I still think they have room to advance,'' Kodama said.

The TOPIX index of all shares traded on the Tokyo exchange's firstsection was up at 1,708.07 as of 0119 GMT, after earlier hitting itshighest point since May.

The tech-sensitive Nikkei was up 56.07 points at 17,265.99.

Advantest, the world's largest maker of tools used to test microchips, gained 2.1 percent to 6,680 yen.

Sales of Japanese equipment used to make microchips are likely topost their second straight year of double-digit growth in the yearstarting in April, bolstered by computer memory demand, an industrygroup said on Monday.

Fellow chip-gear maker Tokyo Electron Ltd. rose 1.1 percent to 9,290 yen.

Reuters>