Dec. 17 (Bloomberg) -- Japanese stocks rose, with benchmarks set for their highest close in a month, after U.S. economic reports on jobless claims and manufacturing eased concerns that growth in the world's largest economy will slow.

Automakers such as Toyota Motor Corp. gained after an industry group said domestic vehicle sales may rise for a third year in 2005. Semiconductor production equipment makers such as Advantest Corp. climbed after an industry report known as the book-to-bill ratio, which gauges demand for chip-equipment tools made in North America, advanced for a second month in November.

``Increasing evidence that the U.S. economy is going to have a `soft-landing' is helping drive Japan's exporters higher,'' said Naoki Fujiwara, who oversees the equivalent of $191 million in Japanese equities as a chief fund manager at Shinkin Asset Management Co. in Tokyo. ``Earnings growth remains strong and that's going to enable stocks to trade higher.'' He favors Toyota, Canon Inc. and Shin-Etsu Chemical Co.

The Nikkei 225 Stock Average jumped 172.41, or 1.6 percent, to 11,096.41 at 1:08 p.m. in Tokyo. The broader Topix index added 11.12, or 1 percent, to 1112.19, with all 33 industry groups that make up the index rising.

Both benchmarks are set to close at their highest since Nov. 17. For the week so far, the Nikkei has gained 3.3 percent, while the Topix has added 2.7 percent.

Monetary Policy

Comments from the Federal Reserve saying economic growth in the U.S., Japan's biggest trading partner, remains strong enough to tolerate higher interest rates have helped spur the gains this week. The Fed on Dec. 14 increased the overnight lending rate by a quarter point to 2.25 percent.

The Bank of Japan today kept interest rates almost at zero and maintained the level of cash it pumps into the world's second- largest economy in a bid to bolster confidence and fight deflation.

Nikkei 225 futures for March delivery jumped 1.4 percent to 11,100 in Osaka and climbed 1.4 percent to 11,105 in Singapore.

Some 645 billion yen ($6.2 billion) in shares included in the Topix traded, 40 percent less than the daily average for the past three months. Four stocks rose for every one that declined on the Tokyo Stock Exchange's first section.

Toyota, Japan's largest automaker, climbed 50 yen, or 1.3 percent, to 4,050. Canon, the world's second-largest seller of digital cameras, added 40 yen, or 0.7 percent, to 5,440. Shin- Etsu Chemical, the world's biggest maker of polyvinyl chloride resin and silicon wafers, climbed 70 yen, or 1.8 percent, to 4,080.

`Resilient'

The number of Americans filing first-time claims for unemployment insurance benefits last week fell to a five-month low, according to a government report, while a Federal Reserve Bank of Philadelphia's regional survey showed manufacturing in the Philadelphia region unexpectedly accelerated this month as orders and shipments rose.

``The market is resilient,'' said Shigeharu Shiraishi, who oversees the equivalent of $16 billion in assets as a managing director at Societe Generale Asset Management (Japan) Co. in Tokyo. ``You have so many reasons to buy, supported by strength in earnings.''

Nissan Motor Co., Japan's second-biggest automaker, added 13 yen, or 1.2 percent, to 1,106. Honda Motor Co., the third largest, rose 80 yen, or 1.5 percent, to 5,310.

Domestic Auto Sales

Domestic sales of all types of cars, trucks, sport-utility vehicles, minicars and vans will probably rise 0.7 percent to 5.87 million units in 2005 from an estimated 5.83 million this year, the Tokyo-based Japan Automobile Manufacturers Association said in a statement yesterday.

Advantest, the world's biggest maker of equipment used to test computer memory chips, advanced 180 yen, or 2.2 percent, to 8,220. Tokyo Electron Ltd., the world's second-largest maker of semiconductor production equipment, rose 170 yen, or 2.9 percent, to 6,070.

A book-to-bill ratio of 1.00 means that North American semiconductor-equipment makers took $100 of new orders for every $100 of products shipped, according to Semiconductor Equipment and Materials International. In October, the ratio stood at 0.96.

Separately, Gartner Inc., an industry researcher, said worldwide sales of semiconductor equipment will fall 15 percent next year to $31.2 billion as excess inventory causes chipmakers to pare spending, adding that growth may return as soon as 2006.

``I'm not expecting the semiconductor production equipment makers to undergo any significant inventory problems,'' said Shinkin Asset's Fujiwara.

DoCoMo Gains

NTT DoCoMo Inc., Japan's biggest mobile phone operator, added 2,000 yen, or 1.1 percent, to 188,000, after saying it will begin selling its first high-speed handset designed to work on networks both in and outside Japan.

Don Quijote Co., a discount retailer, jumped 260 yen, or 4.9 percent, to 5,530. The company late yesterday said it's keeping its fiscal first-half earnings forecasts unchanged, easing concerns about the impact on profit of fires that broke out at two outlets. The company said it's assessing the implications of the blazes for its full-year earnings forecast.

Inpex Corp., Japan's biggest oil explorer, added 2,000 yen, or 0.4 percent, to 511,000. The stock rose on expectations that fund managers who track the Topix index will buy the stock. Shares of Inpex will be included in the Topix as of the close of trading today, according to the Tokyo bourse.

Elsewhere, Konami Corp., Japan's biggest independent maker of video games, jumped 70 yen, or 3.2 percent, to 2,255, after saying it will take over three affiliates -- Konami Computer Entertainment Studios Inc., Konami Computer Entertainment Tokyo Inc. and Konami Computer Entertainment Japan Inc. -- to help coordinate the development of online games.

Konami Computer Entertainment Studios advanced 32 yen, or 3.6 percent, to 922. Konami Computer Entertainment Tokyo rose 35 yen, or 1.6 percent, to 2,215. Konami Computer Entertainment Japan added 46 yen, or 2.7 percent, to 1,785.

To contact the reporter on this story: Tomoko Yamazaki in Tokyo at tyamazaki@bloomberg.net.

Last Updated: December 16, 2004 23:11 EST