TOKYO, March 11 (Xinhua) -- Japan's Nikkei Stock Average rose 0. 96 percent Thursday to a seven-week closing high as a weaker yen gave exporters a boost and investors were encouraged by continued optimism over possible monetary easing and signs of Japan's economic recovery.
Japan's key benchmark Nikkei gained 101.03 points from Wednesday to 10,664.95, marking the highest closing level since January 21.
The broader Topix index of all First Section issues on the Tokyo Stock Exchange was up 7.94 points, or 0.86 percent, to 930. 38.
"Tokyo shares could get a boost if the Bank of Japan expands its monetary easing steps next week," said Mitsushige Akino, chief fund manager for Ichiyoshi Investment Management.
"One possibility is for the BOJ to increase the amount of its fixed-rate fund supply operation to 20 trillion yen from the current 10 trillion yen. Such a step may have little direct impact on the economy but could help Tokyo shares by curbing rises in the yen," he said.
"I think the reason the BOJ might make clear its monetary easing stance would be to prevent yen strength," Akino added.
Japan's central bank taking measures towards monetary easing, continues to be cheered by investors as such a move would weaken the yen and stave off the yen-carry trade seen last year, as well as boost profits for Japanese firms reliant on profits made oversees -- yields when repatriated are diminished when the yen is strong versus other major currencies. The central bank is scheduled to hold a policy meeting next Tuesday and Wednesday.
The U.S. dollar retreated as much as 0.2 percent during trading hours on Thursday, trading around the lower and mid-90-yen level, up from Wednesday's lows in the 89-yen zone.
Subsequently, export-related issues advanced with volume leader Sony Corp. rising 1.9 percent to 3,440 yen and Kyocera Corp. adding 1.2 percent to 8,650 yen.
Canon Inc., the world's largest camera maker, rose 0.87 percent to 4,035 yen and Hitachi Ltd. climbed 2.56 percent to 320 yen. NEC Corp. surged 4.42 percent to 260 yen.
High-tech shares mirrored gains made on Wall Street overnight with chip test maker Advantest Corp. gaining 0.96 percent to 2,201 yen and robotics maker Fanuc Ltd. adding 0.66 percent to 9,180 yen.
Meanwhile Toshiba Corp. edged up 0.23 percent to 440 yen and NGK Insulators Ltd. rose 0.21 percent to 1,870 yen.
Buying was sustained throughout the day's trading, although gains were trimmed in afternoon trading at one point due to a decline in other Asian equities -- especially Chinese shares -- after stronger- than-expected consumer price data came out earlier in the day, raising concerns China may tighten credit to fight inflation, brokers said.
Trading houses and some resource-related shares rose on speculation that increased demand will boost earnings at iron-ore producers.
Trader Mitsui & Co., which owns a 15 percent stake in Vale SA's major shareholder, climbed 2.7 percent to 1,545 yen after the Nikkei business daily newspaper reported Brazil-based Vale is seeking to increase iron-ore prices.
Fellow trader Itochu Corp., which holds a stake in a Brazilian iron-ore producer, climbed 2.2 percent to 780 yen. Nippon Steel Corp., the nation's largest steelmaker, lost 1.2 percent and closest domestic rival JFE Holdings Inc. fell 1 percent.
"The economy is undoubtedly in the midst of mild recovery," said Mitsushige Akino, an asset manager at Ichiyoshi Investment Management Co.
"Iron-ore producers don't think of raising prices unless demand is very strong. That could be further evidence that the global economy is improving."
Shares of consumer lenders extended gains after Nomura Securities earlier this week said Promise's business in Hong Kong will likely see steady growth due to the increasing middle class population there and cited the business expansion potential if it could break into the Chinese market.
Promise Co. Ltd. climbed 2.8 percent to 771 yen, after surging about 14 percent the previous day following the Nomura report. Rival Acom Co. Ltd. jumped 7.6 percent to 1,448 yen after a 4.6 percent gain the day before.
Some 1.8 billion shares changed hands on the Tokyo exchange's First section; up from Thursday's volume of 1.6 billion shares, but down on last year's daily average of around 2.3 billion shares.
Advancing issues outnumbered declining ones on Thursday by 1, 280 to 281.
