Tokyo - Japanese shares gained 0.50% in quiet holiday season trade on Wednesday as a jump on Wall Street to two-year highs lifted sentiment, helping Tokyo brush off the pressure of a strong yen.
The benchmark Nikkei index of the Tokyo Stock Exchange rose 51.91 points to 10 344.54. The Topix index of all first section shares added 0.57%, to 908.01.
The Dow Jones Industrial Average overnight rose 20.51 points, to 11 575.54, buoyed by gains from the energy and utilities sectors.
Higher oil prices prompted by cold weather helped lift the US market despite a disappointing consumer confidence survey.
Robust Hong Kong shares also drove up sentiment in Tokyo.
Players are still looking for new opportunities to invest, as reflected in rising gold and crude prices, said Takashi Ushio, general manager at Marusan Securities.
"With both Europe and the United States expected to continue their quantitative easing measures next year, there are lingering expectations that excess liquidity will continue to support shares," he told Dow Jones Newswires.
But some analysts stayed cautious about whether the rallies could continue into next month.
"There was strong foreign investor buying from November to December, but the key question is whether that will continue through January," Kenichi Hirano of Tachibana Securities told Dow Jones.
Tsuyoshi Segawa, an equity strategist at Mizuho Securities, said investors shrugged off the yen's strength and weak US economic data.
The yen stayed strong at ¥82.26 to the dollar, supported in part by month-end dollar sales by Japanese exporters.
"It's an idiosyncrasy of the Japanese market for shares to rise during the year-end period," said Segawa, adding that the Nikkei had been up for the past 13 years in the last five sessions of the year.
Resource-linked issues rose on higher crude prices, with Inpex up 0.31% to 483 500 and Showa Shell Sekiyu up 1.34% to 754.
Hitachi jumped 2.41% to ¥425 on brighter prospects for winning a large British railways project.
Toyota gained 0.78% to ¥3 250, but Honda ended off 0.15% to ¥3 255.
Nintendo added 0.62% to 24 440. Sony was nearly flat, off 0.03% to 2 956.