TOKYO (AFX) - Share prices closed sharply firmer across the board following the strong overnight gains on Wall Street, where a benign inflation data and a sharp drop in crude oil prices eased worries about the outlook for the US economy, dealers said.
The Nikkei 225 Stock Average ended up 241.75 points or 2.2 pct at 11,077.16, off a high of 11,102.43.
The broader-based TOPIX index of all First Section shares added 22.23 points or 2.0 pct to 1,131.42.
Gainers overwhelmed losers 1,398 to 194, with 57 stocks unchanged. Trading was active, with 1.53 bln shares changing hands, up from 1.31 bln yesterday.
"Stock prices gained sharply in knee-jerk reaction to the upbeat tone on Wall Street, which was led by tame CPI data. Moreover, investors took comfort from foreign investors coming back today as pre-opening buy orders via foreign brokers topped sell orders for the first time in 12 trading days," said Norihiro Fujito, senior investment strategist at Mitsubishi Securities.
Overnight, the US Labor Department reported that the core consumer price index was unchanged in April, the lowest rate of underlying inflation since November 2003.
Dealers said the softer-than-expected core CPI data may convince the US Federal Reserve to be less aggressive in raising interest rates.
Crude oil for June delivery settled at a three-month low of 47.25 usd a barrel, down 1.72 usd, or 3.5 pct on the New York Mercantile Exchange.