Japanese shares climb on bets Fed to hold rates steady; Topix sets record close

Japan's Nikkei share gauge climbed on Friday, extending its weekly advance, after softer U.S. producer prices eased pressure for a near-term Federal Reserve interest rate hike and supported risk appetite.

The benchmark Nikkei 225 advanced 0.59% to close at 68,713.80, notching a 4.7% weekly gain. The broader Topix climbed 0.51% to 4,197.20, a record closing level.

U.S. stocks rallied overnight after data showed July producer prices were unchanged, reinforcing expectations the Fed will hold rates steady next month. The S&P 500 and the Nasdaq both closed at record highs.

"We are seeing a trend where the rise in U.S. share prices is spilling over into Japan," said Wataru Akiyama, an equities strategist at Nomura Securities. "Factors such as lower crude oil prices and waning expectations for an early interest rate hike in the U.S. due to slowing inflation are positive for the Japanese market as well."

There were 132 advancers on the Nikkei 225 against 92 decliners and one unchanged.

The largest percentage gainers in the index were Nexon, up 19.85% and marking its biggest one-day gain since February 2024, followed by Shift, 7.57% higher, and Nintendo, which gained 6.91%.

The largest losers were Trend Micro, down 14.60%, marking its steepest one-day fall since February 2024, followed by Lasertec, 4.12% lower, and Isetan Mitsukoshi Holdings, which lost 3.98%.