TOKYO, June 5 (Xinhua) -- The Nikkei stock inched up 0.08 percent Thursday on high hopes for the U.S. economy, but profit- taking and a strengthening yen capped gains in later trade.
The benchmark Nikkei 225 index gained 11.41 points points from Wednesday to close at 15,079.37, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 1.20 points, or 0.10 percent lower, at 1,232.75, bringing an end to the index's 10-day rally, its longest in almost five years.
Brokers said that the market mood was bright in early trade following Wall Street's lead overnight, after the release of some upbeat U.S. economic data.
They pointed to the latest Automatic Data Processing figures showing that private employers added 179,000 jobs to their payrolls last month after hiring 215,000 workers in April, as not being overly disappointing ahead of the upcoming main jobs reports on Friday.
Economists had predicted a gain of 210,000 private sector jobs in May.
The U.S. Labor Department will release keenly-anticipated data on U.S. employment Friday which may show private payrolls have increased 210,000 in May after a 273,000 gain in April, according to analysts' estimates.
"If U.S. non-farm payrolls are above 200,000, U.S. yields are likely to rise and that'll help Japanese stocks," said Akio Yoshino, chief economist at Amundi Japan Ltd.,
The Institute for Supply Management also reporting its services sector index rose to 56.3 last month from 55.2 in April on increasing new orders and order backlogs, as well as increased hiring, marking the highest reading in nine months, was a boon for both U.S. and Japanese markets, analysts said Thursday.
With increasing factory activity confirmed on Tuesday, the Federal Reserve's Beige Book also added to investor confidence here with its latest view that economic activity expanded in all 12 Fed regions, consumer spending had increased, and the labor market viewed to have strengthened with hiring activity steady.
Along with the slew of U.S. economic data currently underpinning the market here, investors are also watching moves by the European Central Bank (ECB) to see if it opts for a rate cut after its meeting later in the day, to help the region tackle embryonic signs of deflation.
"With the ECB's likely rate cut already factored in, it's very possible that things are setting up well for a stock market selloff just after Prime Minister Shinzo Abe makes his economic plan announcement," said one local fund manager.
"The volume we're seeing, while nominally good, still is not reflective of overwhelming long-term investor support," he said.
With the U.S. dollar fetching 102.53 yen from 102.74 in U.S currency trade, some exporters took a hit as they rely on a weak yen to boost their earnings and profits made overseas when the funds are repatriated.
As such, Toyota, the world's largest automaker, skidded down 0. 29 percent to 5,837 yen, while consumer electronics giant Sony retreated 0.30 percent to 1,656 yen. Camera maker Canon, meanwhile, lost 0.08 percent to 3,372 yen.
Sharp advanced 3.75 percent to 304 yen after Deutsche Bank upgraded its rating on the stock and electrical motor maker Nidec edged up 0.2 percent to 6,020 yen, after the firm announced on Wednesday it plans to set up its inaugural production facility in India.
Nikkei heavyweight SoftBank gained 0.32 percent to 7,817 yen, after reports that its Sprint unit in the U.S. was moving closer to a potential 32 billion U.S. dollar buyout of T-Mobile.
Asahi, Japan's biggest beverage maker, jumped 5.4 percent to 3, 109 yen, marking its highest closing level since the firm listed in 1974. The firm said it plans to spend up to 50 billion yen to buyback more than 4.3 percent of outstanding shares.
But Sapporo Holdings slumped 6.6 percent to 426 yen, after saying its affiliate beer maker will reclassify its low-priced " third-category beer", or "beer alternative" to a low-malt beer, which comes with a higher tax rate.
Trading volume on Thursday dropped to 2.02 billion shares on the Tokyo Exchange's First Section, down from Wednesday's volume of 2.09 billion shares, with advancing issues outnumbering declining ones by 834 to 799.