TOKYO (Dow Jones) -- Tokyo stocks rose above the 10,000 mark Wednesday on buying in Canon and other large cap stocks by both European funds and domestic pension funds, while chip-related stocks such as Advantest rallied on hopes for stronger global semiconductor demand.

“Investors are picking up 'quality shares' with cheap valuations,” noted Tsuyoshi Kawata, senior strategist at Nikko Cordial Securities, adding that some players are testing the waters as European debt jitters have receded.
The Nikkei 225 Stock Average rose 179.26 points, or 1.8%, to 10,067.15, reclaiming the 10,000 mark for the first time since May 20. The Topix index of all the Tokyo Stock Exchange First Section issues also rose 13.55 points, or 1.5%, to 892.38, with 32 of 33 subsectors ending in positive territory.
Kawata added that investors remain wary about the European economy. Depending on how overseas markets perform over the next few weeks, the Nikkei could move in a range of 9500-10,500, he said.
Trading volume was somewhat low due partly to a lack of Asian participation as Chinese markets remain closed. Only 1.7 billion shares changed hands on the TSE First Section.
Recently-battered large cap stocks outperformed the market. One trader reported baskets of European buy orders worth about Y12 billion and another Y20 billion worth of buys by domestic trust funds.
Canon gained 3.9% to Y3,880 and Toshiba rose 3.0% to Y483. Nissan Motor added 4.5% to Y698 as Goldman Sachs hiked its rating to Buy, citing relatively low exposure to the European market and a strong outlook for its electric-powered vehicle business.
Nintendo, which is listed on the Osaka Securities Exchange, gained 5.2% to Y26,520 on hopes that its new 3D gaming device may create new demand after being unveiled at the E3 Electronic Entertainment Expo in Los Angeles.
“People have been skeptical about the gaming industry due to several announcements saying the new (Apple) iPhones also have gaming capacity,” said Mattia Ciancaleoni, director of equity sales at Citigroup. He added that investors are revisiting Nintendo on hopes that it can create a new platform in the 3D gaming space.
Semiconductor manufacturing equipment makers were stronger, with Tokyo Electron rising 2.3% to Y5,770 and Advantest gaining 2.5% to Y2,028, helped by media reports saying Taiwan Semiconductor Manufacturing Company raised its revenue growth forecast for the global semiconductor market to 30% from 22%.
On the other hand, Mizuho Financial Group closed down 0.6% to Y155--a new 2010 low--on speculation that its planned mammoth new stock offering will kick off soon. In May, Mizuho made a shelf registration for a fresh share issue worth up to Y800 billion. On the Osaka Securities Exchange, the Nikkei 225 September futures contract ended up 250 points, or 2.5%, at 10,090.