TOKYO: Tokyo stocks rose 1.16 percent on Wednesday morning, starting the new year in an upbeat mood on better-than-expected economic data globally.
The headline Nikkei-225 index, which lost 17.34 percent in 2011 to finish at its lowest year-end level for almost three decades, gained 97.80 points to 8,553.15 by the break.
The Topix index of all first-section issues rose 12.47 points, or 1.71 percent, to 741.08.
The rise came after the Dow Jones Industrial Average surged 1.47 percent in New York on Tuesday thanks to positive US, Chinese and eurozone manufacturing data.
But Yoshihiro Okumura, general manager at Chibagin Asset Management, said gains in the shares of Japanese exporters on positive manufacturing data may be limited due to a strong yen and concerns about Iran.
"There are many risk factors," he said.
Traders were closely monitoring the situation in the Strait of Hormuz, a vital waterway through which 20 percent of the world's oil is transported.
Iran on Monday tested missiles near the strait, highlighting its threats to close the vital passageway as the West readies to impose more economic sanctions over Tehran's nuclear drive.
A jump in crude prices pushed oil-related stocks, with Japan Petroleum Exploration up 3.15 percent at 3,105 yen.
Automakers were higher largely on bargain-buying. Toyota Motor rose 2.61 percent to 2,632 yen and Honda Motor was up 3.19 percent at 2,423.
Suzuki Motor jumped 2.57 percent to 1,633 yen following a Nikkei newspaper report that the firm plans to build another engine factory in Indonesia, tripling its output there to 150,000 units a year.
The euro bought $1.3025 and 99.85 yen in Tokyo midday trade, down from $1.3051 and 100.10 yen in New York late Tuesday.
The dollar stayed weak against the Japanese yen, trading at 76.66 yen compared with 76.68 yen in New York.
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