Tokyo investors will keeping an eye on the Bank of Japan's quarterly business sentiment survey and Chinese economic figures next week, analysts say, after the Nikkei index hit a month high on Friday. The Tokyo Stock Exchange has seen weeks of big moves, with the benchmark Nikkei at one stage down 20 percent from its five-year high in May.
But the Nikkei rose 3.38 percent, or 447.19 points, to 13,677.32 in the week to June 28, on top of a 4.28 percent gain the previous week.
The broader Topix index of all first-section shares gained 3.13 percent, or 34.44 points, to 1,133.84, over the past week.
"Players are regaining confidence as the Nikkei is showing signs of a recovery," said Toshikazu Horiuchi, a broker with IwaiCosmo Securities. "But they are still concerned about the China risk. Players will try to confirm if the market has hit bottom while monitoring the impact of the China situation."
Fears of a Chinese banking liquidity crisis shocked markets this week as investors fretted over the health of the world's number two economy.
However, those worries subsided on Friday after the People's Bank of China said it would provide support to credit-starved institutions.
On Monday of the Bank of Japan will release its quarterly Tankan business sentiment survey, giving markets a chance to gauge the impact on the economy of the huge spending policies laid down by Japanese premier Shinzo Abe.
Government data Friday showed Japanese factory output in May rose by a better-than-expected 2.0 percent month-on-month, as the export sector logged rises on the back of a sharp decline in the yen.
Investors will also be watching out for Chinese manufacturing data and forex trading, with a weakening yen again providing support to equities. But Tachibana Securities market analyst Kenichi Hirano warned: "Worries over Chinese economic growth and the integrity of its financial system are far from over.
"Japan shares are increasingly sensitive to data points, and next week's China manufacturing figures and Japan quarterly Tankan survey results may prove pivotal in determining short-term market trajectory." On Friday, the Nikkei closed up 3.51 percent while the Topix added 3.19 percent.
On Thursday, Wall Street rallied for a third straight session thanks to comments from a top Fed official that the bank would not hastily end its bond-buying, which helps keep interest rates low.
The bank's New York president William Dudley said "a rise in short-term rates is very likely to be a long way off". He added that its policy deeply depends "on the progress we make towards our objectives" of pushing unemployment down to 6.5 percent and getting the economy back up to strength.
"This means that the policy - including the pace of asset purchases - depends on the outlook rather than the calendar."
The Dow rose 0.77 percent, the S&P 500 added 0.62 percent and the Nasdaq was 0.76 percent higher.
Also in the United States, figures showed jobless claims continued to fall last week, while there was also a big increase in pending home sales.