* Chip-linked shares rise after U.S. peers gain
* Elpida climbs after media report of upbeat earnings
* Eyes on BOJ policy decision and ensuing impact on yen
By Masayuki Kitano
TOKYO, March 17 (Reuters) - Japan's Nikkei average hit an
eight-week high on Wednesday as chip shares rose on hopes of
positive earnings guidance from Intel <INTC.O>, with Elpida
Memory <6665.T> also climbing on a media report of upbeat
earnings.
The Nikkei got additional support after the Federal Reserve
maintained its pledge to keep interest rates low for an extended
period, which lifted U.S. shares to a 17-month high.
Market players are now focusing on the Bank of Japan's policy
decision due later on Wednesday and any impact it may have on the
Japanese currency.
Sources familiar with the thinking of Japan's central bank
have told Reuters it is leaning towards easing monetary policy,
under pressure from a government calling for action to beat
deflation and which some analysts suspect is aimed at weakening
the yen. []
The BOJ is expected to keep interest rates unchanged at 0.1
percent, and a focal point is whether the central bank will
expand its three-month fixed-rate fund supply operation, either
by increasing the amount from the current 10 trillion yen or by
extending the length of the operation to six months or longer.
"One key point to watch is how currencies move after the
BOJ's decision," said Yutaka Miura, a senior technical analyst at
Mizuho Securities, adding that Tokyo shares could extend gains if
the yen weakens following the announcement.
But market players say there is a risk that Tokyo shares may
not rise much even if the fund supply scheme is expanded, since
the yen has already retreated this month and Tokyo shares have
already rallied on speculation about such measures.
The Nikkei was up 74.07 points at 10,795.78 <> by the
midday break after having climbed as far as 10,819.08, its
highest level in around eight weeks.
The broader Topix <> rose 0.6 percent to 943.37 <>.
CHIP SHARES RISE
In terms of flows, some hedge funds known for short-term
trading were buyers this morning, both to cover short positions
and to create new longs, said Hiroaki Kuramochi, chief equity
marketing officer at Tokai Tokyo Securities.
In addition, European players picked up some small- to
medium-cap shares, Kuramochi said.
Nissan Motor <7201.T> rose 1.6 percent to 767 yen after its
head, Carlos Ghosn, who is also chief executive of its alliance
partner Renault <RENA.PA>, said he was open to equity exchanges
when asked about reports that Renault and Daimler <DAIGn.DE> are
in talks about an equity tie-up as part of a possible longer-term
partnership. []
Consumer lender Promise Co <8574.T> jumped 5 percent to 814
yen after the Nikkei business daily reported the company will
likely raise about 50 billion yen via asset-backed securities.
Chip-related stocks rose broadly after Intel shares rose 4
percent on Tuesday on speculation that the world's top chip maker
is expected to release positive guidance for the current quarter,
and the Philadelphia semiconductor index <.SOXX> gained 2.7
percent. []
Chip equipment maker Tokyo Electron <8035.T> rose 1.2 percent
to 5,900 yen and Advantest <6857.T>, which supplies chip testers
to chip makers such as Intel, gained 1 percent to 2,219 yen.
Elpida Memory, the No.1 Japanese maker of DRAM chips, climbed
1.9 percent to 1,791 yen. The Nikkei business daily said the
company is expected to return to the black with an operating
profit of almost 20 billion yen ($222 million) for the year
ending this month, buoyed by a recovery in DRAM chip prices.
[]
That would beat a forecast of an operating profit of 16.5
billion yen from 19 analysts polled by Thomson Reuters I/B/E/S.
(Reporting by Masayuki Kitano; Editing by Chris Gallagher)
