TOKYO: Japanese shares hit a fresh one-month high on Friday as better-than-expected U.S. economic data and news of scheduled trade talks between the United States and China bolstered appetite for global stocks.

The benchmark Nikkei average gained 0.54% to 21,199.57, its highest closing level since Aug. 1. For the week, the index advanced 2.4%, its biggest gain in five months.

“Although the mood is getting better, I don't think investors are fully optimistic," said a trader at a Japanese asset manager. “If the Nikkei can break above the 200-day moving average next week, it may create a feeling of FOMO (fear of missing out)."

The Nikkei's 200-day moving average stood around 21,227.

Global equity markets welcomed upbeat U.S. data and news that Washington and Beijing agreed to high-level talks early in October, raising hopes for a de-escalation of the damaging conflict.

The dollar climbed to a one-month high of 107.235 yen overnight, providing a tailwind for shares of Japanese exporters as a weak yen enhances corporate profits when they are repatriated.

Machinery and automakers, major beneficiaries of a weakening yen, were among the best performing sectors of the Tokyo's 33 subindexes, up 1.4% and 1.2%, respectively. Nissan Motor Co rose 2.5% and Honda Motor Co climbed 3.0%.

Bank shares gained broadly after U.S. Treasury yields ticked higher overnight but then pared gains after the Bank of Japan governor Haruhiko Kuroda told the Nikkei newspaper that deepening negative rates were among the bank's policy options.

Mitsubishi UFJ Financial Group  and Bank of Kyoto  rose 0.8% and 1.3%, respectively, while the banking sector subindex added 0.5%.

Bucking the trend, Nikkei heavyweight SoftBank Group Corp  shed 2.7% on media reports that WeWork, owner of office space sharing startup The We Company, might slash the valuation it will seek in a planned initial public offering. WeWork is backed by SoftBank Group, which has invested or committed to invest $10.65 billion since 2017.

Rakuten Inc dived 5.2% after media reports that the internet firm is pushing back the commercial launch of its wireless carrier service by six months because of delays in building the network.

Credit Saison Co gained 2.2% after it and Daiwa Securities announced a capital alliance, with Daiwa acquiring 5% of Credit Saison's shares. Daiwa added 0.9%.

The broader Topix rose 0.17% to 1,537.10, its highest close in a month, with turnover of 2.09 trillion yen  ($19.5 billion), below its daily average of 2.29 trillion yen over the past year.

Copyright Reuters, 2019