Japan's Nikkei average hit its highest close in more than two weeks on Thursday, helped by a surge in exporters' shares as the yen weakened against the dollar amid expectations the Federal Reserve will cut interest rates at a slower pace than expected in the future.
The Nikkei index closed up 2.13 percent to 37,155.33 points, its highest closing level since September 3.
The US dollar rose sharply on Thursday, recovering from a slight decline following the big US interest rate cut that markets had already been expecting.
The dollar rose 1.2 percent against the yen, hitting a session high of 143.95 earlier in the day.
Fumio Matsumoto, senior analyst at Okasan Securities, attributed the dollar's gains to expectations of a slower pace of future U.S. interest rate cuts and a statement from the Federal Reserve that the world's largest economy is not performing as badly as markets had feared.
The (Japanese) market expected the yen to rise after the Fed cut interest rates by 50 basis points as domestic stocks fell, but what happened is that the yen fell, Seiichi Suzuki, chief equity analyst at Tokai Tokyo Intelligence Laboratory, told Reuters.
The broader Topix index rose 2.01 percent to 2,616.87, with Toyota Motor Corp rising 5 percent to provide the biggest boost to the index, while Honda Motor Co rose 3.35 percent.
Toyota shares have lost 9.95 percent and Honda 5.29 percent since the beginning of the month.
Investors avoided buying automakers' shares this month due to the yen's gains, Matsumoto said.
All 33 sector sub-indexes on the Tokyo Stock Exchange rose, with shipping stocks up 4.49 percent to be the best performer.
The insurance index advanced 3.97 percent as Japanese bond yields rose, while automakers gained 3.84 percent.
Fast Retailing, owner of the Uniqlo brand, rose 2.41 percent, providing the biggest boost to the Nikkei. Tokyo Electron, a maker of chip-making equipment, rose 2.47 percent.
