Japanese shares will likely see more gains next week following Friday's strong performance in the wake of the European Central Bank's plan to buy the bonds of debt-hit eurozone nations, analysts said. In the week to September 7, the benchmark Nikkei 225 index at the Tokyo Stock Exchange rose 0.36 percent, or 31.74 points, to 8,871.65.
The broader Topix index of all first-section issues rose 0.49 percent, or 3.56 points, to 735.17. On Friday, the Nikkei and Topix soared 2.2 percent and 2.25 percent, respectively, following the bank's announcement on Thursday.
The ECB unveiled plans to buy the debt of struggling members of the eurozone in a bid to lower their borrowing costs and prop up the embattled euro, which also surged on the news, breaking the 100 yen barrier for the first time since July 5.
It "will enable us to address severe distortions in government bond markets which originate from, in particular, unfounded fears on the part of investors of the reversibility of the euro", ECB chief Mario Draghi said of the plan. "We will do whatever it takes" to keep the eurozone together, he added.
But it was not immediately clear if debt-hit nations would take advantage of the ECB offer, which is dependent on them agreeing to a bailout and undertaking fiscal reforms.
Critics led by Germany had warned that buying the debt of troubled eurozone nations would let them avoid painful austerity cuts that are crucial to repairing their fiscal health. The plan, however, was embraced by investors, with the dollar also rising against the yen, fuelled by better-than-expected US employment figures. "The risk-on mood is strengthening," said Kengo Suzuki, forex strategist at Mizuho Securities in Tokyo. Next week, investors will be looking to a US Federal Reserve meeting for signs of further easing by the central bank to power the world's biggest economy, said Kenichi Hirano, a market analyst at Tachibana Securities.