March 24 (Bloomberg) -- Japan's Nikkei 225 Stock Average rose, led by exporters such as Honda Motor Co., as the dollar rose to a six-week high against the yen boosting optimism that the value of their dollar-denominated sales will increase.

``The dollar's rebound has given a tailwind to chase exporters and especially automakers today,'' said Tatsuro Yuzawa, who helps manage $1.9 billion in Tokyo at Credit Suisse Trust & Banking Co.'s investment arm. ``I'm expecting more money from foreign investors to flow into Japan and support prices.''

Advantest Corp. paced gains by semiconductor-related shares after an industry report showed a global chip excess inventory will probably end during the next quarter after chipmakers scaled back production plans.

The Nikkei gained 41.12 or 0.4 percent, to 11,780.24 at 10:52 a.m. in Tokyo. The Topix index added 0.68, or 0.1 percent, to 1194.53. Oil-related stocks such as Inpex Corp. fell after crude oil prices had the biggest drop this year in New York.

Nikkei 225 futures for June delivery gained 0.4 percent to 11,720 in Osaka and rose 0.4 percent to 11,715 in Singapore.

Stock benchmarks were also supported as government reports showed growth in Japan's economy, the world's second largest, may be sustained. A government report yesterday showed average residential land prices rose in Tokyo's five main wards last year for the first time since 1987.

A separate government report before the market opened today showed the nation's service industries expanded in January at the fastest pace in nine months, led by retailers and wholesalers.

Dollar Rebound

Honda, Japan's No. 3 automaker, gained 80 yen, or 1.5 percent, to 5,340. Matsushita Electric Industrial Co., the world's biggest maker of consumer electronics, climbed 9 yen, or 0.6 percent, to 1,571.

The dollar recently rose as high as 106.45 yen, its highest since Feb. 10. A stronger dollar means Japanese exporters get more for their dollar-denominated sales.

Honda, which generates as much as 80 percent of its operating profit in the U.S., said in January currency changes cost it 11.1 billion yen in operating profit in the third quarter.

Advantest, the world's biggest maker of equipment used to test computer memory chips, rose 90 yen, or 1.1 percent, to 8,200. Tokyo Electron Ltd., the world's second-largest maker of semiconductor production equipment, advanced 80 yen, or 1.3 percent, to 6,190.

They tracked gains by the Philadelphia Semiconductor Index, which advanced 1.2 percent in the U.S.

Global stockpiles of chips will be ``completely cleared out'' early in the April-to-June period after falling 24 percent to $780 million, or four days' worth of stock, in the first quarter, ISuppli Corp. said in an e-mailed statement.

``Exporters and chip stocks are looking attractive given the evidence of inventory worries easing,'' said Koichi Seki, an equity manager at Chuo Securities Co. in Tokyo.

Oil's Slump

Crude oil for May delivery dropped 4 percent to $53.81 a barrel in New York, its biggest one-day decline this year, after the Energy Department reported oil inventories reached the highest since July 2002. In recent Asian trading, the contract fell 0.4 percent to $53.62 a barrel.

The Topix Mining and Oil & Coal Products Indexes were the two worst performers among the 33 industry groups that make up the Topix.

Inpex, Japan's largest oil explorer, tumbled 18,000 yen, or 3.2 percent, to 552,000. Teikoku Oil Co., an oil and natural gas producer, slipped 18 yen, or 2.3 percent, to 771.

Earlier this month, Credit Suisse First Boston said investors should reduce their holdings in Japan's oil-related shares on concern that sales margins are narrowing and demand for petroleum products is slackening.

Sanyo Drops

Elsewhere, Sanyo Electric Co. slumped 13 yen, or 4 percent, to 339 after saying it expects the largest annual loss in its 55- year history, citing costs to repair an earthquake-damaged plant and a slowdown in sales.

The company also said it won't pay a dividend in the second half, reversing its previous plan to pay 3 yen a share.

The forecast prompted Goldman, Sachs & Co. to cut its rating on the stock.

TDK Corp., Japan's largest maker of disk-drive parts, advanced 100 yen, or 1.4 percent, to 7,520. The company raised its planned dividend for the six months ending March 31 to 40 yen from 30 yen.

Other companies that previously announced dividend increases gained. Kyocera Corp., the world's largest maker of ceramic packaging used to protect finished microchips, rose 100 yen, or 1.4 percent, to 7,720. KDDI Corp., Japan's second-largest mobile phone operator, added 2,000 yen, or 0.4 percent, to 533,000.

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

Last Updated: March 23, 2005 20:59 EST