The benchmark Nikkei 225 average bounced back and closed above 18,000 for the first time in nearly seven years and seven months on Monday, helped by buying on dips following higher U.S. and European stocks.
The Nikkei climbed 91.41 points, or 0.51 percent, to end at 18,004.77, the first close above the 18,000 line since July 24, 2007. On Friday, the key market gauge retreated 66.36 points.
The Topix rose 10.05 points, or 0.69 percent, to 1,459.43, after falling 0.01 point the previous trading day.
The Tokyo market kicked off the week on a firm note on the heels of rises in U.S. and European equities late last week.
But worse-than-expected Japanese gross domestic product data for the October-December period, released just before the opening bell, weighed down the market’s upside, brokers said.
After selling to cash in gains ran its course, the Nikkei turned higher again and recovered 18,000.
In the afternoon, the Nikkei seesawed around 18,000 in the absence of fresh incentives, with investors sitting on the fence prior to Tuesday’s auction of new 20-year Japanese government bonds and the Bank of Japan’s policy-setting meeting for two days from Tuesday, brokers said.
Japan’s GDP expanded 2.2 percent on an annualized basis in the third quarter of fiscal 2014. The figure came against an average forecast of 3.6 percent growth among 22 economic research institutes surveyed by Jiji Press.
“Investors were disappointed to see the sluggish GDP data, but expectations are high that consumer spending will drive up the Japanese economy” following expected pay increases at major companies, said Hiroichi Nishi, equity general manager at SMBC Nikko Securities Inc.
The recent upturns in the Nikkei’s 25-, 75- and 200-day moving averages also suggest a brighter course for the market, Nishi added.
Still, analysts expect that stock prices are unlikely to continue rising sharply from the current levels in view of lingering wariness about the Greek debt problem and uncertainty over the outlook for the European economy.
Rising issues outnumbered falling ones 1,188 to 563 in the TSE’s first section, while 111 issues were unchanged.
Volume decreased to 2.4 billion shares from Friday’s 2.5 billion shares.
Megabank groups enjoyed handsome gains thanks to renewed buying. Mitsubishi UFJ and Sumitomo Mitsui both jumped over 3 percent.
Robot-maker Fanuc surged 3.42 percent to rewrite its listing-to-date high following news Monday that the company will build a plant to boost production of numerically controlled equipment.
A rise in crude oil prices shored up resource-related names.
Among them were oil developers Inpex and Japan Petroleum Exploration and trading houses Mitsubishi and Mitsui.
On the other hand, technology giants Sony and Hitachi and automakers Mazda and Fuji Heavy Industries dropped.
Drugmaker Takeda, mobile carrier NTT DoCoMo and household goods manufacturer Kao also lost ground.
In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average edged up 30 points to end at 17,990.