TOKYO: Tokyo stocks rose 1.24 percent on Wednesday, ending the first session of the 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 104.76 points to 8,560.11, the highest finish since December 12.
The Topix index of all first-section issues rose 14.38 points, or 1.97 percent, to 742.99.
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.
Investors were not completely embracing risk as currency levels warrant caution, said Ichiyoshi Investment Management chief fund manager Mitsushige Akino.
"Investors reduced their positions in Japan stocks at end-2011 on fears of the overseas financial situation," but their stance is more bullish now as conditions at least look somewhat stable, he said.
Brokerages, banks and insurers were broadly higher as were automakers.
Japan Tobacco was up 4.41 percent to end at 378,000 yen amid buying into large-capital blue-chips.
Besides the strong yen, risk factors include concerns about Iran, analysts 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 2.82 percent at 3,095 yen.
Suzuki Motor firmed 2.19 percent to 1,627 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 $1.3028 and 99.92 yen in Tokyo afternoon trade, down from $1.3051 and 100.10 yen in New York late Tuesday.
The dollar stayed weak against the Japanese yen, trading at 76.70 yen largely unchanged from 76.68 yen in New York.
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