TOKYO, Jan 12 (Reuters) - Japan’s benchmark Nikkei share average inched up to close at a fresh three-decade high on Tuesday, as drug makers led the charge on a report that Chugai Pharmaceutical’s drug was effective in treating COVID-19 patients. The Nikkei index ended 0.09% higher at 28,164.34 after recovering from early declines, while the broader Topix index edged up 0.16% to 1,857.94. “Investors bought back stocks as soon as the market started falling, showing the fundamental strength of demand,” said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management. “They (also) got confidence in the market as U.S. futures rose overnight.” Chugai Pharmaceutical jumped 5.91% on the drug-effectiveness news, helping boost the drug maker index by 1.68%. Other companies such as Takeda Pharmaceutical, Eisai, and Shionogi & Co gained between 1.95% and 3.38%. The COVID-19 treatment news comes at a time when Japan plans to expand its declaration of state of emergency to three western prefectures including Osaka to stem the spread of COVID-19, according to local media. Among other shares, SoftBank Group gained 1.36% after a fund it manages sold part of its stake in Uber Technologies for $2 billion. Retail stocks rose, led by a 5.52% rise in Ryohin Keikaku after the Muji retail stores operator posted a 69% jump in quarterly net profit. Lawson rose 2.24%, while Watts Co jumped 10.37%. Semiconductor shares rose on prospects of stronger chip demand, with Tokyo Electron adding 0.29% and Shin-Etsu Chemical climbing 3.29%. Bucking the trend, automakers slid after Toyota Motor and Honda Motor said they would cut vehicle production this month due to a shortage of semiconductors. Toyota fell 0.59% and Honda Motor declined 1.55%. The underperformers among the Topix 30 were Nippon Telegraph and Telephone Corp, which was down 2.54%, followed by Seven & i Holdings Co Ltd, losing 2.08%.