Tokyo stocks rose Friday on growing expectations of an interest rate cut this year by the U.S. Federal Reserve, but the gains were capped amid caution toward earnings by Japanese firms.
The 225-issue Nikkei Stock Average ended up 155.13 points, or 0.41 percent, from Thursday at 38,229.11. The broader Topix index finished 14.75 points, or 0.54 percent, higher at 2,728.21.
On the top-tier Prime Market, gainers were led by marine transportation, oil and coal product, and metal product issues.
The U.S. dollar mostly hovered in the mid-155 yen zone after data released overnight pointed to a slowing labor market in the United States and fueled market expectations of a rate cut by the Fed to boost the economy, dealers said.
Stocks rebounded after the benchmark Nikkei lost more than 750 points in the past two days. But they gradually trimmed the gains, with investors concerned about the business outlook after some major firms released modest earnings forecasts for fiscal 2024, brokers said.
"Investors reacted more to the weaker-than-expected earnings outlook than usual because they had increasingly expected robust performances on the strong U.S. economy and the weak yen," said Shingo Ide, chief equity strategist at the NLI Research Institute.
The Nikkei had a heavy upside as it approached the 39,000 threshold, also affected by investors securing profits ahead of the weekend, brokers said.
