TOKYO: Japan’s Nikkei share average jumped to a one-week closing high on Thursday, as data showing underlying US inflation remained on its slow, downward trajectory cemented expectation that the Federal Reserve would leave interest rates unchanged next week.

The Nikkei index rose 1.41% to 33,168.10, posting its highest close since Sept. 6 and sharpest daily gain since Aug. 28.

The broader Topix rose 1.13% to 2,405.57.

“The big event was over without any negative surprises, which lifted investor sentiment,” said Jun Morita, general manager of the research department at Chibagin Asset Management, referring to the US inflation report.

Uniqlo brand owner Fast Retailing rose 2.96%, providing the biggest boost to the Nikkei. Chip-making equipment maker Tokyo Electron gained 3.03% and chip-testing equipment maker Advantest climbed 2.02%.

“Investors bought back futures to cover short positions, which lifted cash equities,” said Kentaro Hayashi, a senior strategist at Daiwa Securities.

“Expectation of Japan’s exit from deflation has been prompting investors to buy back Japanese stocks.”

With inflation exceeding the Bank of Japan’s 2% target for more than a year, market players are bracing for changes in the central bank’s ultra-loose monetary policy.

The BOJ is scheduled to hold a two-day policy meeting next week. Among smaller stocks, Torikizoku Holdings surged 8.96% after the restaurant chain issued a positive full-year outlook.

H.I.S. tumbled 7.17%, even as the travel agent narrowed its losses.

The company posted a 5.6 billion yen ($38.06 million) net loss for the nine months through July, compared with a 33.26 billion yen loss a year earlier.

All but one of the Tokyo Stock Exchange’s 33 industry sub-indexes closed higher.

Refiners jumped 3.49%, making the sector the top performer. Airlines slipped 0.14%.