Japan's Nikkei average rose 0.8 percent on Friday, with retailer Aeon climbing in the wake of an upbeat profit forecast and as shares rebounded broadly after a resilient performance from the Dow industrials. The Nikkei climbed after succumbing to profit-taking a day earlier, exacerbated by a fall in the euro on a report saying Greece may seek aid from the International Monetary Fund in April.
"Greece's woes are one of the factors that will continue to keep a lid on the global markets, but on the other hand, many investors don't seem to expect the most devastating outcome," said Kenichi Hirano, operating officer at Tachibana Securities. "Encouraged by the strength in US stocks, investors are covering shorts after they sold stocks too much yesterday, spooked by big moves in the euro," he said.
The Dow industrials rose for an eighth consecutive session on Thursday, helped by Boeing which climbed after Bernstein Research said the 787 programme appeared to be making substantial progress. A mixed group of economic figures kept the broader S&P 500 in check while European shares fell on concerns about Greece. The benchmark Nikkei gained 80.69 points to 10,824.72. It fell 1 percent the previous day, down from a two-month intraday high of 10,864.30 struck on Wednesday.
The broader Topix added 0.9 percent to 948.93. The Nikkei rose 0.7 percent on the week, for its sixth straight weekly gain. While technical signals suggest that the market may be due for a pull-back after its recent rally, some fund managers say there is unlikely to be a major change in the Nikkei's recent trend.
"Since corporate earnings are improving, it is hard to think that the stock market will enter a downtrend and I think market players envisage shares rising to higher levels," said Tomomi Yamashita, fund manager at Shinkin Asset Management. Such gains may not come immediately because valuations for Tokyo shares are already a bit pricey, meaning fresh catalysts such as a fall in the yen may be needed for the market to rally further, he added.
Some 1.8 billion shares changed hands on the Tokyo exchange's first section, sliding from a seven-week high of 2.8 billion shares hit last Friday. Advancing stocks outnumbered declining ones by nearly 3 to 1. Market players said investors were reluctant to actively take positions ahead of a three-day weekend. Japanese markets will be closed on Monday for a national holiday.
Shares of exporters rose to help lead the market higher. Digital camera and office equipment maker Canon gained 2.4 percent to 4,120 yen and electronics device firm Kyocera Corp rose 1.8 percent to 8,710 yen. Japan's second-largest retailer Aeon Co rose 2.4 percent to 1,012 yen after it said it was likely to post an annual operating profit of 128.8 billion yen ($1.4 billion), beating market expectations thanks to a sharp recovery in the second half.
But property shares retreated after a government survey showed Japanese land prices fell for a second straight year in 2009. Commercial land prices sank to the lowest on records going back to 1974 as demand for office space and housing continued to slump in the wake of the financial crisis. Mitsui Fudosan shed 1.8 percent to 1,584 yen and Mitsubishi Estate slipped 2 percent to 1,447 yen.
The news follows drops in property stocks a day earlier after Morgan Stanley downgraded the sector and both major developers. Nikon Corp fell 3 percent to 2,031 yen after Goldman Sachs cut its rating on the maker of digital cameras and chip-making equipment to "neutral" from "buy" and removed it from its "conviction list".