The 225-issue Nikkei Stock Average added 116.21 points, or 0.42 percent, from Wednesday to close the day at 27,696.08.
The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, gained 10.39 points, or 0.53 percent, to finish at 1,962.61.
Local brokers said the benchmark Nikkei stock index remained in positive territory for the majority of the day, propelled initially by U.S. shares performing well overnight, particularly tech-oriented issues.
They added that investors continued to seek out issues of Japanese firms reporting strong earnings and profit outlooks, despite the constraints coming from COVID-19-related issues and a global shortage of semiconductors.
"Investor sentiment was lifted as, overall, many firms have recently reported solid earnings," Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities Co., was quoted as saying.
"Even companies that were hit severely by the coronavirus pandemic, including railway operators and department stores, have shown that they have recovered from their worst phase," said Fujito.
Some investors opted to secure profits ahead of a three-day weekend here, with markets closed on Friday for a national holiday, with some strategists suggesting with this in mind and ahead of U.S. consumer data due to be released soon, investors were reluctant to chase the market higher.
The early gains on the Nikkei were cut because investors started selling shares as soon as the market showed a sign of a recovery, Chihiro Ohta from SMBC Nikko Securities said, adding, "With the long weekend ahead of us and the U.S. consumer data due out soon, there were not much reason for investors to buy."
By the close of play, construction, electric appliance and chemical issues comprised those that gained the most, while issues that advanced outpaced those that fell by 1,447 to 636 on the First Section, while 100 ended the day unchanged.
Nevertheless, tech issues advanced after their U.S. peers rose overnight, with Advantest adding 2.8 percent and Tokyo Electron closing 1.8 percent higher on hopes the firm would report solid earnings after the market's close.
Delivery firm Yamato was the worst performer on the Nikkei diving 12.1 percent.
Honda Motor accelerated 5.6 percent, however, after raising its full-year net profit forecast, although Tokyo Motor dropped 2.7 percent, after reporting the previous day that despite booking a record profit for the April-December period, its output forecast was lowered owing to uncertainties surrounding the pandemic and the chip supply.
Cosmetic firm Shiseido was a notable winner, however, jumping 6.8 percent, after releasing solid figures for the January-December period, owing to robust sales in its North American and European markets.
On the main section on Thursday, 1,396.24 million shares changed hands, dropping from Wednesday's volume of 1,502.67 million shares.
The turnover on the final trading day of the week came to 3,450.83 billion yen (29.84 billion U.S. dollars).
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