TOKYO: Japanese shares were up 0.53 percent by noon on Monday after opening at their highest level since August as risk appetite returned and the yen continued to weaken, analysts said.
The Nikkei 225 index at the Tokyo Stock Exchange ended the morning session 51.61 points higher at 9,698.99.
It was slightly off its opening at 9,726.20 -- the highest level since August 2 when it began the day at 9,872.17.
The Topix index of all first-section issues gained 0.92 percent or 7.70 points to 841.99.
Global stock markets tumbled after Standard & Poor's downgraded US debt in early August, and uncertainty over the sovereign debt crisis in Europe has weighed for months.
Japanese shares have risen steadily since the start of February on a string of solid US economic indicators, the Bank of Japan's expansion of monetary easing programmes, and the yen's slide from record high levels.
The market benefited as the dollar stayed relatively firm at 81.13 yen Monday in Tokyo, retaining its recent gains but going a shade below the 81.20 yen seen in New York Friday.
The Nikkei has gained around 10 percent since the start of the month.
"Further weakening in the yen will likely buoy Japanese stocks," Hideyuki Ishiguro, a supervisor of investment strategy at Okasan Securities, told Dow Jones Newswires.
The Tokyo bourse could rise further if other Asian markets also firm, said Kazuhiro Takahashi, general manager of investment strategy & research at Daiwa Securities.
"The Nikkei is targeting levels seen before it tumbled last August" when it was around the 10,000 level, Takahashi told Dow Jones Newswires.
Tokyo banking shares rose as markets recovered amid eased concerns over European sovereign debt problems.
Exporters also benefited from the yen's continued weakness, with Toyota Motor up 1.62 percent at 3,435 yen and Honda Motor up 2.42 percent at 3,165 yen.
Sony also jumped 3.44 percent at 1,800.
Shortly before the Tokyo market opened, financial chiefs from the group of 20 leading and developing economies issued a joint communique, demanding the eurozone put in place a larger firewall before they consider handing more funds to the IMF.
The G20 finance ministers and central bank governors finished their two-day meeting in Mexico City.
The euro stood at $1.3455 and 109.12 yen, compared with $1.3451 and 109.22 yen in New York.
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