TOKYO, April 2 (Reuters) - Japanese shares rallied on Friday, on hopes of earnings recovery and gains in semiconductor-related shares as they look to raise their outputs to deal with a global shortage of chips.
"We are entering a phase where the stock market rallies even as interest rates rise because of strong earnings growth. This stage will eventually lead to an overheated market but we are not there yet," said Masayuki Kubota, chief strategist at Rakuten Securities.
Nippon Electric Glass 5214.T rose 3.9% after the manufacturer of glass products used for cars and flat panel displays revised up its earnings outlook, citing stronger shipments. related shares continued to lead the market as the industry looks set to boost manufacturing amid a global shortage of chips. 6857.T gained 3.4%, while Tokyo Electron 8035.T rose 2.8% and Screen Holdings 7735.T added 2.7%.
The bullish sentiment was also fuelled by U.S. President Joe Biden's $2 trillion spending plan that included a call to spend $50 billion in chip manufacturing and other technology research, said Fumio Matsumoto, chief strategist at Okasan Securities.
Automakers were another bright spot, drawing additional help from the yen's decline in recent weeks.
On the other hand, investors rotated out of value shares, which had seen sharp recovery in the past couple of months, such as shippers .ISHIP.T .
Value shares underperformed, with Topix value .TOPGV rising just 0.15%, compared with 1.0% gains in Topix Growth .TOPXG .
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