The benchmark Nikkei average gained further ground and hit a four-month closing high Friday, led by the strength of index heavyweight Fast Retailing.
The 225-issue average gained 159.18 points, or 0.73 percent, to close at 21,870.56 on the Tokyo Stock Exchange, its highest finish since Dec. 5. On Thursday, the key market gauge rose 23.81 points.
On the other hand, the Topix index of all first-section issues ended down 1.12 points, or 0.07 percent, at 1,605.40, after declining 1.14 points the previous day.
After moving sluggishly in early trading following a strong start, the Nikkei firmed gradually due mostly to hefty purchases of clothing chain Fast Retailing triggered by rosy earnings announced Thursday for the half ending in February, market sources said.
The Nikkei maintained its strength in afternoon trading, bolstered mainly by continued buying of Fast Retailing shares, the sources said.
In the meantime, the Topix remained in negative territory for most of the session as buying was held in check ahead of the release of Japanese and U.S. corporate earnings next week, the sources said.
Fast Retailing alone pushed up the Nikkei by about 160 points on a closing basis, a market source said.
The yen’s drop against the dollar prompted futures-linked purchases, said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management Co.
Ryuta Otsuka, strategist at the investment information department of Toyo Securities Co., said the Nikkei’s rise was driven by “buying by speculators, such as hedge funds.”
But “the Topix showed the reality” of the Tokyo market, Otsuka noted. Most market players “failed to move before the earnings reporting season as well as the 10-day holiday” due to start in late April in Japan, he added.
Falling issues outnumbered rising ones 1,219 to 809 in the TSE’s first section, while 113 issues were unchanged.
Volume inched down to 1.101 billion shares from Thursday’s 1.111 billion shares.
Fast Retailing closed 7.89 percent higher.
Technology investor SoftBank Group was also buoyant after U.S. ride-hailing company Uber Technologies Inc., in which SoftBank is the top shareholder, filed for an initial public offering on Thursday.
Employment information service firm Recruit Holdings and automaker Toyota were among other major winners.
By contrast, convenience store chain Lawson tumbled 12.21 percent, with investor sentiment battered by its weak operating and net profit estimates for the year ending in February 2020.
Also sold were optical equipment maker Olympus, daily goods maker Kao and mobile phone carrier KDDI.
In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average rose 190 points to end at 21,860.