(MENAFN) Tokyo's stock market closed higher on Thursday, buoyed by gains on Wall Street and bolstered by encouraging economic data from Japan. The positive sentiment was fueled by hopes that the U.S. Federal Reserve might cut interest rates following recent economic indicators and Japan’s better-than-expected GDP figures.

The Nikkei 225, Japan’s benchmark stock index, rose by 284.21 points, or 0.78 percent, ending the trading day at 36,726.64. This increase reflects the market's positive reaction to both international and domestic factors that contributed to the day's gains. Similarly, the broader Topix index closed up 18.85 points, or 0.73 percent, at 2,600.75, indicating a broadly positive market performance.

The rise in Tokyo stocks mirrored the strong performance of the U.S. stock market from the previous day. Key contributors to the Nikkei’s gain included major companies such as Fast Retailing and Tokyo Electron, which played a significant role in driving the index higher. The overall buying momentum was also supported by the latest U.S. consumer price index data, which showed a 2.9 percent increase in July from a year earlier. This marked the slowest pace of inflation since March 2021, fueling speculation that the Federal Reserve might soon begin to cut interest rates.

In Japan, preliminary GDP figures for the second quarter exceeded market expectations, providing additional support for the market and enhancing investor sentiment. On the top-tier Prime Market, sectors such as banks, securities houses, and oil and coal products saw notable gains. Advancing issues outnumbered declining ones by a margin of 1,018 to 577, with 51 issues remaining unchanged, reflecting a broadly optimistic market outlook.

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