Tokyo stocks closed 0.87 percent up on Wednesday as the yen fell on speculation of further central bank easing after dismal October trade figures for Japan.
The benchmark Nikkei 225 index at the Tokyo Stock Exchange rose 79.88 points to 9,222.52 while the Topix index of all first-section shares edged up 0.65 percent, or 4.97 points, to 767.01.
The yen has weakened in recent days after the leader of Japan's main opposition, Shinzo Abe, the front runner to become prime minister following December elections, called for bolder easing steps by the Bank of Japan (BoJ).
The central bank, having launched easing measures in recent months, held steady after its meeting Tuesday but Abe's comments and recent poor economic data have sparked market speculation that the BoJ will soon take more action.
"Although the BoJ stood pat on its policy Tuesday, expectations continue for easing steps at its next meeting (in December)," said Yoshihiro Okumura, general manager of research at Chibagin Asset Management.
"The yen may weaken until then," he told Dow Jones Newswires.
A strong yen hurts Japanese exporters by making their goods less competitive overseas, so a weakening currency tends to prompt buying of their shares and gives a boost to the market.
Japan on Wednesday posted its worst October trade figures in more than 30 years, underscoring persistent weakness in the world's third-largest economy amid the global slowdown and an export-denting territorial spat with China.
The yen hit a seven-month low on the dollar near the 82 level as finance ministry data showed last month's trade deficit nearly doubled to $6.7 billion from a year ago.
But the Nikkei index gave up some its earlier gains in afternoon trade as eurozone finance ministers failed to strike a deal to unblock bailout funds needed to keep Greece from bankruptcy, Hiroichi Nishi, general manager of equity division at SMBC Nikko Securities told Dow Jones Newswires.
In stock trade, Honda Motor climbed 3.18 percent to 2,657 yen and Canon rose 0.96 percent to 2,820.
Panasonic edged 0.73 percent lower to 404 yen after Moody's on Tuesday cut its credit rating to just above junk status, the latest blow to Japan's loss-riddled electronics industry.
Sharp dropped 4.65 percent to 164 yen after the embattled electronics maker said nearly 3,000 employees in Japan had applied for an early retirement scheme, as the firm undergoes a huge corporate overhaul to stem losses.
Snack food maker Calbee was down 4.26 percent to 6,950 yen after saying it would recall 5.3 million bags of potato chips in Japan over fears some may contain shards of glass following an accident at a domestic factory.