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Tokyo - Japanese stocks rose 1.89% by the break on Monday after data showed the economy grew more than expected in April-June, while dealers also cheered Tokyo's successful bid to host the 2020 Olympics
The Nikkei 225 index added 261.29 points to 14,122.10 by the break, having surged almost 3% in early trades, while the Topix index of all first-section shares was up 1.73%, or 19.80 points, at 1,167.62.
"Tokyo's hosting the Olympics, and the ongoing yen weakening trend, combined with improving global economic outlook will likely offset negative factors such as weaker-than-expected US jobs data and concern over US military action in Syria," said Hiroichi Nishi, general manager of equities at SMBC Nikko Securities.
The dollar bought ¥99.57 in Tokyo, against ¥99.11 on Friday afternoon in New York, where the greenback slid after the US government reported the economy had added a fewer-than-expected 169 000 jobs in August.
Shares of companies that could benefit from 2020 Summer Olympics-related demand soared.
"Based on past data, Olympics-related shares such as infrastructure could rise for about a month until the decision on a sales tax hike is made," said Eiji Kinouchi, senior strategist at Daiwa Securities Capital Markets.
Leading construction firm Kajima soared 9.97% to ¥397 while Shimizu jumped 8.53% to ¥483. Major real estate firm Mitsui Fudosan added 6.5% to ¥3,435 while Mitsubisihi Estate climbed 4.74% to ¥2,827.
Traders said the Olympics would also give the market a psychological boost and help Prime Minister Shinzo Abe's pro-spending economic programme, dubbed "Abenomics".
"The Nikkei will likely rise to 15,000 by the end of September on the back of renewed hopes for Abenomics," said Mitsushige Akino, fund manager at Ichiyoshi Asset Management.
"The Olympics will likely regenerate interest in Japanese equities among foreign investors as it will make it easier for Mr Abe to move forward with his growth strategies, and the implementation of a consumption tax hike and corporate tax cuts," he added.
Abe is considering whether to go ahead with a planned sales tax hike in April that many fear could derail any recovery. The move could see consumption taxes double to 10% by 2015.
Economy Minister Akira Amari said Monday that Abe would make a tax-hike decision on October 1 as he unveils a broader economic stimulus plan.
The market was also supported by data that confirmed Japan's economic recovery is on track.
Revised figures showed growth of 0.9% for the April-June quarter from the previous three months, compared with an initial 0.6% estimate.
Hisao Matsuura, strategist at Nomura Securities, said capital spending among the nation's firms, a key measure of business sentiment, rose sharply, which could see an improvement in household spending and labour market conditions.
US stocks ended little changed Friday amid uncertainty over Syria and following a disappointing jobs report, the Dow slipping 0.10% while the S&P 500 and Nasdaq were both flat.
