TOKYO, April 2 (Reuters) - Japanese shares closed higher on Friday, with the Nikkei hitting a two-week high, due to hopes of earnings recovery and gains in semiconductor-related shares as they look to raise their outputs to deal with a global shortage of chips. The Nikkei share average ended 1.58% higher at 29,854.00. The broader Topix added 0.71% to 1,971.62. “We are entering a phase where the stock market rallies even as interest rates rise because of strong earnings growth. This stage will eventually lead to an overheated market but we are not there yet,” said Masayuki Kubota, chief strategist at Rakuten Securities. Nippon Electric Glass rose 4.0% after the manufacturer of glass products used for cars and flat panel displays revised up its earnings outlook, citing stronger shipments. Semi-conductor related shares continued to lead the market as the industry looks set to boost manufacturing amid a global shortage of chips. Advantest gained 4.2%, while TDK added 4.0% and Tokyo Electron rose 3.0%. The bullish sentiment was also fuelled by U.S. President Joe Biden’s $2 trillion spending plan that included a call to spend $50 billion in chip manufacturing and other technology research, said Fumio Matsumoto, chief strategist at Okasan Securities. The broader electronic machinery sector also gained, with Sony Group rising 4.7%, while strength in global tech shares supported Softbank Group, which rose 3.6%. Automakers were another bright spot, drawing additional help from the yen’s decline in recent weeks. Mazda Motor gained 3.2%, while Suzuki Motor rose 3.1%. Investors rotated out of value shares to growth shares, with Topix value rising just 0.24%, compared with 1.20% gains in Topix Growth. As rise in growth shares tends to lift the Nikkei more than the Topix, the so-called N-T ratio jumped back, erasing all losses after the Bank of Japan announced it will stop buying Nikkei-linked ETFs on March 19. (Reporting by Hideyuki Sano; editing by Uttaresh.V)