TOKYO, Dec 24 (Reuters) - Japan's Nikkei average hit its highest in three months on Thursday, lifted by high-tech exporters such as Advantest on a weaker yen and after better-than-expected earnings from U.S. peers buoyed Wall Street.
Japan Tobacco jumped after saying it would raise cigarette prices by more than the government's tax hike of 70 yen ($0.77) per pack, while Kirin advanced after a newspaper reported the beer maker and rival Suntory Holdings are close to agreeing to a merger ratio.
'Investors are welcoming gains in U.S. stocks and stabilising currency moves. The solid performance of U.S. technology stocks is particularly positive for the tech-heavy Nikkei average,' said Yutaka Miura, a senior technical analyst at Mizuho Securities.
'While investors will continue to keep an eye on currency moves, the Nikkei may rise further to test the year's (closing) high of 10,639.'
The Nikkei was up 1 percent at 10,484.82 after rising as high as 10,497.91, its highest point since Sept. 24.
The broader Topix added 0.8 percent to 910.55.
Japanese markets were closed on Wednesday for a national holiday.
The Nasdaq Composite Index climbed 0.8 percent on Wednesday. Better-than-expected results boosted Red Hat Inc shares and lifted other business software companies.
Micron Technology Inc also shot up after posting its first quarterly profit in nearly three years.
The dollar was steady against the yen and trading around 91.70 yen. Investors cheer a weaker yen as it boosts exporters' profits when they are repatriated.
TECHS LEAD
Chip-tester maker Advantest climbed 3 percent to 2,405 yen and Tokyo Electron Ltd, the world's No.2 semiconductor equipment maker, also gained 3 percent to 5,900 yen. Sony Corp added 1.1 percent to 2,680 yen.
Japan Tobacco shares shot up 4.9 percent to 323,000 yen after saying it would raise cigarette prices by more than the government's tax hike, aiming to offset an expected decline in demand in the world's third-largest cigarette market.
Kirin jumped 4.1 percent to 1,487 yen. Kirin and Suntory may agree to a merger ratio that would give the founding family of Suntory a more than 33.4 percent stake in the merged firm, allowing them to veto board decisions, the Nikkei business daily said.
But Kirin said in a statement it had not made an announcement on the matter and that the report was based on speculation.
Energy-linked shares gained after oil prices rose more than 3 percent to above $76 a barrel on Wednesday after U.S. inventory data showed crude oil inventories in the world's top energy consumer fell more than expected.
Oil and gas field developer Inpex Corp was up 1.4 percent at 704,000 yen.
(Editing by Michael Watson)
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