Tokyo shares closed 0.95 percent higher Thursday thanks to a weaker yen, a jump on Wall Street driven by upbeat US jobs data and hopes for a resolution to Greece's debt crisis. The Nikkei 225 index at the Tokyo Stock Exchange gained 193.18 points to 20,522.50 by the close, while the Topix index of all first-section shares rose 0.72 percent, or 11.83 points, to 1,648.24.
Tokyo picked up a strong lead from US markets, which rallied after a gauge of US manufacturing activity for June came in at its highest level in five months, while a survey of private job creation marked its strongest reading this year. Investors are now turning their focus to non-farm payrolls later Thursday, which is expected to supply more evidence that the world's top economy is gaining strength.
"Just as the Federal Reserve expected, as we head toward higher interest rates the economic mood is recovering," said Mitsushige Akino, executive officer at Ichiyoshi Asset Management in Tokyo.
Earlier Wednesday, a closely watched Bank of Japan survey showed that confidence among major manufacturers jumped in the three months to June, hitting its highest level in more than a year.
While European leaders have dismissed an offer from cash-strapped Greece for a new bailout - which had been presented just before it defaulted - traders are confident the crisis will eventually be resolved.
"There has to be a negotiated deal there and I think the market believes there will be at the end of the day despite the drama," Michael Cuggino, a fund manager at Pacific Heights Asset Management, told Bloomberg News.
In Tokyo share trading, Toyota rose 0.15 percent to 8,153 yen, Sony added 1.22 percent to 3,514.5 yen, major bank Mitsubishi UFJ rose 0.52 percent to 892.7 yen and market heavyweight Fast Retailing, which operates the Uniqlo clothing chain, jumped 2.22 percent to 57,870 yen.
Sharp surged 8.6 percent to 164 yen after ratings agency Standard & Poor's moved the troubled electronics giant back out of "selective default", just a day after lowering its assessment on the firm.