Japan's Nikkei stock average rose 1.6 percent on Friday and gained for a second straight week, lifted by a softer yen and a rally on Wall Street the previous day. Canon Inc and other exporter shares were boosted as the yen stayed in sight of a one-month low hit versus the dollar the previous day on easing risk aversion.
Technology shares rose after sector bellwethers like Apple surged on Thursday as Wall Street rallied on hopes for new developments in US steps to stimulate the economy. "Expectations for fresh developments with US economic measures next week, including the establishment of a 'bad bank', and a weaker yen are encouraging investors to pick up stocks," said Fumiyuki Nakanishi, manager at SMBC Friend Securities.
The Nikkei's gains were capped by caution ahead of US jobs data due later on Friday. Market watchers said the slight improvement in sentiment towards the US economy, which had helped underpin stocks, could be dampened again if the numbers point to a worse-than-expected deterioration in the job market. US non-farm payrolls likely shed 525,000 jobs in January following 524,000 jobs lost the previous month, a Reuters poll showed.
The unemployment rate is seen at 7.5 percent, compared with 7.2 percent a month earlier. The benchmark Nikkei climbed 126.97 points to 8,076.62, after briefly touching its highest point in a week. The Nikkei rose 1 percent on the week, gaining for the second consecutive week - the first since December. The broader Topix rose 0.6 percent to 790.84. Exporters such as Canon jumped 4.9 percent to 2,560 yen, while Honda Motor advanced 3.9 percent to 2,255 yen.
Toyota Motor Corp trimmed earlier gains after ratings agency Moody's Investors on Friday cut its credit rating and gave a negative rating outlook for Toyota Motor as the world's top automaker heads for its first-ever annual consolidated operating loss. Toyota gained 1.6 percent to 3,090 yen after hitting the day's high of 3,150 yen before the Moody's announcement. Market players said the downgrade had a limited impact on the overall market.
"Moody's had already initiated a review on Toyota's rating and the downgrade came as little surprise," said Takashi Kamiya, chief economist at T&D Asset Management. "Rather, the market is focusing on recent signs that the rate of deterioration in key economies may be slowing, like the latest rise in China's PMI, for example. This explains why gains are not skewered towards so-called defensive stocks," he said.
According to data released on Wednesday, China's official purchasing managers' index, or PMI, for January rose to 45.3 from 41.2 in December - well above the record low of 38.8 hit in November - and fed hopes for an economic recovery. Asahi Breweries jumped on a media report that Japan's largest beer maker was considering a bid for Anheuser-Busch InBev's South Korean unit.
Asahi gained 3.1 percent to 1,371 yen. The Nikkei business daily reported the Japanese beer maker and South Korea's Lotte Group are in talks on a joint acquisition of No 2 South Korean brewer Oriental Brewery Co for 100 billion to 150 billion yen ($1.1 billion-$1.6 billion). Asahi later said in a statement it was not considering a bid. "Japanese beer makers have no choice but to search for growth overseas because the population at home is shrinking and demand is slowing," said Nakanishi at SMBC Friend Securities.
"Considering the weakness of the won, the timing is also good for a bid like this." Mitsui Fudosan shed 2.6 percent to 1,263 yen, while Mitsubishi Estate Co, which also cut its annual profit outlooks on Thursday, declined 1.3 percent to 1,225 yen. The real estate subindex, which fell 1.7 percent, was the biggest loser among the subindexes. Trade was active on the Tokyo exchange's first section, with 1.97 billion shares changing hands compared with last week's daily average of 1.93 billion. Declining shares outnumbered advancing ones, 876 to 705.