Japan's Nikkei stock average rose 0.6 per cent on Friday, buoyed by resource and energy shares amid high commodity prices as US data fed hopes the economic slump is waning, though nerves about looming non-farm payrolls data capped gains.
Mizuho Financial Group and other banks gained after their US peers rose on a sector upgrade by RBC Capital Markets, and Canon Inc climbed on news it was reviving shelved plans to build a factory.
But market analysts said gains were likely to be limited ahead of U.S. jobs data due later in the day.
''If the numbers are better than expected investors will get confirmation that the economy's really improving, but there's worry about what will happen if the figures are worse than consensus,'' said Yumi Nishimura, a deputy general manager of the investment advisory section at Daiwa Securities SMBC.
''It does seem as if we're seeing signs that the falls in world markets have stopped, but it's still a bit early to say much more than that.'' Wall Street rose on renewed hopes for economic recovery after first-time U.S. jobless claims fell for a third straight week and the number of people remaining on benefit rolls fell for the first time since the start of the year.
But some analysts were sceptical, noting that the claims may have fallen due to the long Memorial Day holiday and that most retailers' May sales missed expectations.
''Perhaps now that people have the time to really look at both sets of data, pessimism about the sales data may be overpowering the encouragement of jobless claims,'' said Hiroaki Osakabe, a fund manager at Chibagin Asset Management.
The benchmark Nikkei gained 56.78 points to 9,725.74, while the broader Topix rose 0.4 percent to 914.53.
OIL GAINS Oil climbed to a seven-month high on Thursday and rose above $69 a barrel on Friday, after the drop in jobless claims, which boosted expectations of an economic recovery that could revive ailing energy demand.
Goldman Sachs said a potential economic rebound alongside production cuts by the OPEC cartel could propel crude to $85 a barrel by the end of the year and to $95 a barrel by the end of 2010.
Oil and gas field developer Inpex climbed 6.8 percent to 845,000 yen and Nippon Oil gained 3.3 percent to 597 yen. Showa Shell Sekiyu rose 1.8 percent to 943 yen.
Strong metals prices, especially copper, helped buoy trading houses, with Mitsubishi Corp up 2.4 percent at 1,910 yen and Mitsui & Co rising 3.1 percent to 1,300 yen. Itochu Corp rose 1.7 percent to 717 yen.
Banks gained too, with Sumitomo Mitsui Financial Group up 2.9 percent to 3,850 yen and Mizuho Financial climbing 1.3 percent to 241 yen.
''There's a sense that banks have been lagging a bit on the recent rebound,'' Daiwa SMBC's Nishimura said.
Tokyo Electron jumped 4.7 percent to 4,880 yen, Advantest Corp rose 3 percent to 1,875 yen, and Sony Corp rose 1.9 percent to 2,690 yen.
Mazda Motor Corp surged 8.8 percent to 273 yen after Nikko Citigroup raised its rating on the automaker to ''buy/medium risk'' from ''hold/medium risk'' and lifted its target price to 350 yen from 270 yen.
In a note to clients Nikko Citigroup said it expects Mazda to return to profitability in the fourth quarter and forecast an operating loss of 40 billion yen for the year to March 2010, against Mazda's forecast for a loss of 50 billion yen.
Trade was active, with 1.2 billion shares changing hands on the Tokyo Exchange's first section compared with last week's morning average of 1 billion.
Advancing shares outnumbered declining ones 827 to 698.