The Nikkei average closed at its highest level since early May on the Tokyo Stock Exchange Thursday, following an overnight rise in U.S. technology shares.
The 225-issue Nikkei rose 46.98 points, or 0.22 percent, to end at 21,756.55, a level unseen since May 7. It added 88.69 points on Wednesday.
The Topix index of all first-section issues was up 2.76 points, or 0.18 percent, at 1,577.85, following a gain of 6.27 points.
Tech stocks such as semiconductor-related issues and makers of electronic parts rose further after the U.S. tech-heavy Nasdaq composite index and SOX Philadelphia semiconductor index closed at their all-time highs on Wednesday, brokers said.
But Japanese stocks cut their initial gains toward the close.
Investors refrained from active trading ahead of earnings releases from a host of major firms, as well as monetary policy meetings at the European Central Bank later on Thursday and at the U.S. Federal Reserve next week, said Ryuta Otsuka, strategist at the investment information department of Toyo Securities Co.
For the Nikkei to go further and break the 22,000 line, the index will need “fresh positive factors such as the yen’s further fall or surprisingly positive earnings,” an official of an online securities firm said.
Rising issues outnumbered falling ones 1,404 to 642 in the TSE’s first section, while 104 issues were unchanged.
Volume decreased to 986 million shares from 995 million shares on Wednesday.
Semiconductor inspection device maker Advantest jumped 20.23 percent with a limit gain a day after releasing quarterly earnings that were considered not as bad as investors had expected, brokers said.
Wafer maker Shin-Etsu Chemical surged 7.24 percent a day after announcing its April-June consolidated operating profit that beat market expectations.
Among other winners were technology investor SoftBank Group and air conditioner maker Daikin.
Construction machinery makers Komatsu and Hitachi Construction met with selling after U.S. peer Caterpillar fared poorly overnight.
Nissan fell 2.05 percent on media reports that the automaker’s April-June consolidated operating profit fell by some 90 percent from a year before.
After the close of Thursday’s trading, Nissan reported a 98.5 percent fall in consolidated operating profit for the quarter ended in June.
Also on the negative side were clothing store chain Fast Retailing and automaker Suzuki.
In index futures trading on the Osaka Exchange, the key September contract on the Nikkei average rose 80 points to end at 21,750.