Tokyo investors will be keeping a close eye on US economic news next week, with hopes for a solid recovery in the world's biggest economy boosting sentiment and helping drive the Japanese market higher. For the week to August 2, the benchmark Nikkei 225 index gained 2.38 percent, or 336.18 points, to 14,466.16.
The broader Topix index of all-first section shares added 2.49 percent, or 29.11 points, over the week to 1,196.17. Japanese shares have benefited from a strong performance on Wall Street, which has steadily firmed on a string of upbeat US economic data. The rally in US shares, fuelled by strong manufacturing data from China, Europe and the United States, saw the S&P 500 end 1.25 percent up at an all-time closing high. The Dow added 0.83 percent Thursday.
A weakening yen supports the Tokyo bourse as it makes exporters more competitive overseas, which tends to lift their shares, while more evidence that the US Federal Reserve would maintain its monetary easing policies for now was another upbeat sign for investors.
The stimulus has been credited with helping prop up global equity markets. "The Tokyo market will continue to watch corporate earnings announcements and selected shares will benefit in line with their earnings," Daiwa Securities said.
On Friday, the Nikkei was lifted by the strong dollar, which bought 99.62 yen in afternoon trade, compared with 99.52 yen late in New York and 98.63 yen in Tokyo earlier Thursday.
"The Nikkei will likely continue to advance as uncertainties surrounding global economies have waned and expectations for better earnings for Japanese exporters mount on the back of a stronger dollar," said Hiroichi Nishi, general manager of equities at SMBC Nikko Securities.
On Friday, SoftBank and Sharp helped drive the index higher after impressing with their first-quarter earnings released earlier this week.
SoftBank's net profit more than doubled for the three months to June, while Sharp managed to reduce its loss in the same period thanks to the weaker yen and cost-cutting.
SoftBank, which recently completed a $21.6 billion takeover of Sprint Nextel, jumped 3.44 percent to 6,900 yen and Sharp leapt 3.40 percent to 425 yen. Sony, which swung to a net profit in April-June, rose 0.90 percent to 2,123 yen after giving up some of its earlier gains on profit-taking.
Toyota - which announced after markets closed a near doubling in quarterly profit and said it was on track to produce more than 10 million vehicles this year - jumped 3.37 percent to 6,430 yen.