TOKYO: Tokyo stocks rose 0.81 percent on bargain-hunting Friday following two days of losses and ahead of the release of US jobs data that will be key to the Federal Reserve's plans for its stimulus programme.
The benchmark Nikkei 225 -- which lost more than 3.5 percent over the previous two sessions -- climbed 122.37 points to 15,299.86, while the Topix index of all first-section shares was 0.50 percent or 6.18 points higher to 1,235.83.
"Bargain-hunting emerged in late trading following moderate declines over the past two days," said Kenzaburo Suwa, strategist with Okasan Securities.
"But a lot of players stayed on the sidelines ahead of payroll figures to be released later today."
Tokyo's gains reversed losses in the morning session which tracked a dip on Wall Street after surprisingly good US third-quarter economic growth.
The data fuelled expectations the Fed will hasten a plan to scale back its aggressive monetary stimulus, which has been credited with a global equities rally this year.
The Dow fell 0.43 percent and the S&P 500 shed 0.43 percent, while the Nasdaq eased 0.12 percent.
"Some caution has emerged in anticipation of the potential (Fed policy committee) move," Yoshihiro Okumura, general manager of research at Chibagin Asset Management, told Dow Jones Newswires.
"Previously, markets speculated the Fed will start tapering in March. We cannot rule out the possibility of seeing that in December."
Suwa at Okasan Securities warned that upbeat jobs figures would add to that those expectations.
The Fed has said it will only start cutting back on its bond-buying when the unemployment rate is low enough and the economy is strong enough to stand without the bank's assistance.
"If risk-taking sentiment weakens then the (Tokyo) market would likely face selling pressure at least until the next Fed meeting" in mid-December, he said. "Trading will probably be cautious next week."
Investors appeared little moved by Tokyo's decision late Thursday to approve a spending package worth almost $54 billion in a bid to offset a sales tax hike that comes into effect next year. Critics fear it will derail Japan's economic recovery.
Sony shares rose 0.76 percent to 1,838 yen, Panasonic jumped 2.98 percent to 1,173 yen, Nissan gained 1.93 percent to 897 yen and Toyota was unchanged at 6,220 yen.
On currency markets, the dollar fetched 101.91 yen in Tokyo afternoon trade, up from 101.77 yen in New York Thursday. (AFP)