Japan's benchmark Nikkei stock index, the 225-issue Nikkei Stock Average, ended up 306.28 points, or 0.81 percent, from Thursday to close the day at 37,934.76.
The broader Topix index, meanwhile, finished 22.95 points, or 0.86 percent, higher at 2,686.48.
On Friday, the Bank of Japan (BOJ) decided to guide short-term interest rates in a range of zero and 0.1 percent, a month after it ended the negative interest rate policy in its first rate hike in 17 years. The Japanese yen weakened to its fresh 34-year low past the 156 line against the U.S. dollar in the forex market.
The central bank chief Kazuo Ueda told the press that the BOJ does not see any major impact of a weak yen on trend inflation at this point but will continue to monitor developments, adding that the central bank will continue with its government bond buying.
Market watchers here noted that although the unchanged rate was in line with market expectations, speculation about a reduction in the purchase of government bonds had surfaced, which boosted purchases of short-term overseas investors, who had previously held off on buying.
Many local analysts, citing the market sentiment of "getting prepared for an additional rate hike at the June or July meeting," believe that the accelerated depreciation of the yen will further raise import prices and increase inflationary pressures.
In a newly released BOJ inflation outlook report, the year-on-year rate of increase in the consumer price index excluding fresh food for the fiscal year 2026, compiled for the first time, is forecast at 1.9 percent, which is highly volatile.
For fiscal 2024 and 2025, core consumer prices are forecast to rise 2.8 percent, rather than 2.4 percent, in the year to next March, and then 1.9 percent, instead of 1.8 percent, the following year.
On the top-tier Prime Market, gainers were led by issues related to marine transportation, real estate and other products.
Issues that advanced outpaced those that declined by 1,189 to 420, while 42 ended the day unchanged.
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