Japanese shares track Wall Street's record highs in strong start to 2022

By Junko Fujita

TOKYO, Jan 4 (Reuters) - Japanese shares jumped more than 1% on the first trading day of the year on Tuesday, led by strong performances in chip-related heavyweights and automakers, while Wall Street's overnight upbeat finish also boosted risk appetite.

The Nikkei share average was up 1.4% at 29,190.05, as of 0207 GMT, and the broader Topix advanced 1.25% to 2,017.17.

The S&P 500 and Dow Jones Industrial Average posted closing record highs overnight, led by Tesla's 13.5% jump and as investors cheered reports Apple became the first company to hit a $3 trillion market capitalization.

"U.S. market's strong finish has lifted investor sentiment in Japan," said Kentaro Hayashi, senior strategist at Daiwa Securities. "Investors tend to buy heavyweights when the sentiment is strong. That explains why chip-related shares led the gains."

Chip-making equipment maker Tokyo Electron, up 3.18%, was the biggest contributor to the Nikkei's rise, followed by semiconductor test equipment supplier Advantest , which gained 3.67%.

Automakers climbed 3.12%, with Toyota Motor leading the gains following a report that the company is planning to launch its own operating system, which would be capable of handling advanced operations such as autonomous driving.

Honda Motor rose 2.29% and Nissan Motor gained 4.53% on a weakener yen and amid hopes for a production recovery this year, market participants said.

Investors shrugged off concerns about the spread of the coronavirus even after Tokyo confirmed on Monday the highest number of daily infections since October, with increasing cases of the Omicron variant.

Trading firms were worst performers among the top 30 core Topix names, with Mitsui & Co slipping 0.28% and Itochu losing 0.34%.

The volume of shares traded on the Tokyo Stock Exchange's main board was 0.46 billion, compared with the average of 1.14 billion in the past 30 days.

(Reporting by Junko Fujita; Editing by Sherry Jacob-Phillips)