Japan shares gain as optimism builds for earnings season

TOKYO: Japanese shares rose on Friday in broad-based buying, driven by growing expectations that companies will report healthy profits and issue upbeat forecasts in the coming days as corporate earnings reports start to roll in.

The Nikkei 225 Index rose 0.43% to 29,837.54 by 0204 GMT, while the broader Topix gained 0.64% to 1,964.55.

Stocks in Tokyo got off to a bright start, taking their lead from the S&P 500's record closing high and supportive comments from US Federal Reserve Chairman Jerome Powell on Thursday.

Industrial robot and semiconductor manufacturing equipment maker Yaskawa Electric Corp is scheduled to release its earnings report on Friday. Its shares rose 0.34%.

Analysts said this could set the tone for Japan's industrial sector, which is expected to benefit from a rebound in global capital expenditure and rising investment to ease a shortage in semiconductors.

"This is just the beginning of the (equities) cycle," said Junichi Inoue, head of Japanese equities at Janus Henderson Investors.

"This is going to be capex-driven and a bigger cycle than previously. Japanese companies are very strong in capital equipment. In general, the machinery sector should benefit."

The stock that gained the most among the top 30 core Topix names was Sony Group Corp, up 2.52%. Hitachi Ltd rose 2.5%, boosted by reports it was in talks to sell its metals unit. The underperformers among the Topix 30 were Seven & i Holdings Co Ltd, down 2.35%, followed by Honda Motor Co Ltd, losing 0.59%.

For the week, the Nikkei index was on course for a 2.3% rise, bouncing back from a 2.1% decline in the previous week.

There were 177 advancers on the Nikkei index against 46 decliners on Friday.

The volume of shares traded on the Tokyo Stock Exchange's main board was 0.55 billion, compared with the average 1.38 billion in the past 30 days.