Tokyo's Nikkei average jumped 1.6 percent by the close on Friday as a rally on Wall Street and lower oil prices ignited broad-based buying, with weak Japanese GDP data causing only a brief stutter at the start. Banks including Mizuho Financial Group Inc got a lift along with real estate and communications firms as the GDP data showed domestic demand was now carrying most of the burden for maintaining growth in the world's second-largest economy.
The GDP data, released just before the opening, showed the economy grew 0.1 percent in the July-September quarter from the previous three months, well below a market consensus forecast of 0.5 percent. The government in the afternoon revised up the country's September industrial production figure to minus 0.4 percent from the preliminary reading of a 0.7 percent decline, which also fuelled buying of technology stocks.
The Nikkei gained 173.06 points to 11,019.98, closing above the psychologically important 11,000 line for the fist time since Friday last week. The broader TOPIX index was up 1.18 percent at 1,104.02.
Both indices opened with slight losses, but quickly bounced back into positive territory as the market had anticipated poor GDP figures after a drop in machinery orders on Thursday, traders said.
The Nikkei sank 1.35 percent on Thursday after the unexpected fall in September core machinery orders. Trade volume increased to 1.205 billion shares, the highest total this week, but well down on the daily average of 1.521 billion in October. Advancers outnumbered decliners 1,048 to 425. Mizuho, Japan's biggest banking group by assets, which fell 0.48 percent on Thursday, gained 1.67 percent to 425,000 yen. Smaller rival UFJ Holdings Inc rose 1.55 percent to 523,000 yen. Among other firms dependent on domestic demand, leading real estate company Mitsui Fudosan Co climbed 3.67 percent to 1,186 yen and KDDI Corp, Japan's second-largest telecoms operator, rose 1.19 percent to 510,000 yen. Tokyo Electron Ltd gained 3.14 percent to 5,590 yen. The world's second-largest maker of chip equipment said on Thursday that it swung into profit in the fiscal first half as microchip makers stepped up capital investment and it stood by its full-year net profit forecast. Takashi Kamiya, chief strategist at T&D Asset Management, said the GDP numbers were not disappointing when looking at the details, adding that he was still optimistic about Japan's economic growth. "We should not just watch the headline number. When we look at the details, external demand and capital spending were weak but consumer spending showed an improvement."
Precision machinery maker Dainippon Screen Manufacturing Co Ltd reported strong first-half earnings on Thursday and raised its full-year forecasts citing strong capital expenditure by chip makers amid rising demand for digital electronic appliances and personal computers.
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