Nikkei up 1.4 pct as tech, chip shares gain after Intel

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By Aiko Hayashi

TOKYO, April 16 (Reuters) - Japan's Nikkei stock average rose 1.4 percent on Wednesday, boosted by chip-related shares such as Advantest Corp (6857.T: Quote, Profile, Research, Stock Buzz) and other high-tech exporters on optimism about their profitability after Intel Corp (INTC.O: Quote, Profile, Research, Stock Buzz) affirmed its profit-margin target for 2008.

Financial shares, including top lender Mitsubishi UFJ Financial Group (8306.T: Quote, Profile, Research, Stock Buzz), picked up steam after stronger-than-expected quarterly results at several U.S. regional banks boosted stocks of financial companies there.

JVC (6792.T: Quote, Profile, Research, Stock Buzz) shot up more than 6 percent after a source with direct knowledge of the matter said on Wednesday that the struggling consumer electronics maker is considering drastically scaling back its home-use LCD TV operations in Japan. [ID:nTKU003218]

"Investors are returning to Japanese high-tech companies as Intel's earnings indicated that industry-wide demand for semiconductors for PCs hasn't dropped despite the worsening economic outlook," said Kazuhiro Takahashi, a general manager of the equity marketing department at Daiwa Securities SMBC.

Intel on Tuesday affirmed its profit-margin target for 2008, reassuring investors worried about falling memory chip prices and the impact of a weak U.S. economy, sending its stock up 8 percent. [ID:nN15200824]

"I expect gains to be limited as the market awaits a series of earnings overnight, though the Nikkei could reach the 13,300 level if other Asian markets move higher in the afternoon," said Takahashi.

The benchmark Nikkei average .N225 added 184.04 points to end the morning at 13,174.62, after closing up 0.6 percent on Tuesday.