Tokyo shares soared to their highest close in more than six months Thursday thanks to a weaker yen as speculation mounts that the Bank of Japan will launch further easing measures.
The benchmark Nikkei 225 index at the Tokyo Stock Exchange closed 1.56 percent, or 144.28 points, higher at 9,366.80, its best finish since early May. The broader Topix index of all first-section issues was up 1.23 percent, or 9.42 points, at 776.43.
Expectations the central bank will again loosen monetary policy have been fuelled further by data showing Japan recorded its worst October trade figures in more than 30 years.
That came after opposition leader Shinzo Abe said last week that he would pressure the central bank for aggressive easing measures if his party wins next month's general election, as expected.
However, some have cast doubt on Abe's ability to force the BoJ to fall in line with his plan, with John Higgins at Capital Economics saying in a note: "We don't expect a major shift in the BoJ's stance."
He added that "we still think that demand for a safe haven from the crisis in the eurozone will instead keep the yen firm for the next year or two".
Investrust CEO Hideyuki Fukunaga added: "Just as the recent Nikkei rally has been almost entirely due to the weaker yen, further gains will depend on the currency market, but barring another leg up in the dollar, upside resistance will get tougher ahead."
In forex trade, the dollar changed hands at 82.76 yen, from 82.51 in Wednesday US trade, while the euro bought 106.46 yen, also higher than 105.84 in New York.
Sentiment on Thursday was also boosted after banking giant HSBC said China's November manufacturing activity grew for the first time in more than a year, while investors eyed efforts to seal a bailout package for debt-hit Greece.
In stock trading, Canon was up 3.26 percent at 2,912 yen, Honda rose 3.5 percent to 2,750 yen, mobile carrier Softbank rose 4.15 percent to 3,130 yen and camera and medical equipment maker Olympus jumped 3.04 percent to 1,420 yen.