TOKYO: Tokyo stocks closed higher Wednesday after US inflation data came in better than expected, while traders eyed the Federal Reserve’s upcoming policy decision.

The benchmark Nikkei 225 index climbed 0.72 percent, or 201.36 points, to end at 28,156.21, while the broader Topix index rose 0.60 percent, or 11.74 points, to 1,977.42.

The upbeat close followed gains in US stocks, although some investors went into a wait-and-see mode ahead of the Fed’s decision later on Wednesday, Mizuho Securities said.

Official US data on Tuesday showed that inflation slowed more than expected, opening the way for the central bank to reduce the tempo of its rate hikes.

The consumer price index (CPI) reading “opens the door for the FOMC to set a slightly softer tone for longer-term rates at today’s decision,” said Stephen Innes of SPI Asset Management.

“The question is, with inflation still at generational highs, will the Fed walk through that door?”

The dollar fetched 135.45 yen in Asian trade, against 135.59 yen in New York late Tuesday.

The Bank of Japan released its quarterly Tankan survey before the opening bell, which showed that business confidence among large manufacturers slightly waned, but confidence among non-manufacturers improved.

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The reading did not prompt a strong market reaction.

Chip-making equipment manufacturer Tokyo Electron jumped 1.89 percent to 46,150 yen, while Sony Group gained 1.45 percent to 11,150 yen.

Chip-testing equipment maker Advantest advanced 1.12 percent to 9,920 yen while SoftBank Group climbed 0.48 percent to 6,243 yen.