Japanese shares rise on US rally

The benchmark Nikkei 225 index gained 127.15 points, or 1 percent, to 12,887.95.

"The index was supported by positive factors including yesterday's gains in the U.S. market and a decline in oil prices," said Kazuhiro Takahashi, equity strategist at Daiwa Securities SMBC Co. Ltd.

The Dow Jones industrial average jumped 2.52 percent on Wednesday--its biggest one-day gain in more than three months--as investors took heart from tumbling oil prices.

Oil prices have plummeted more than $10 a barrel this week as evidence mounted that record prices were slowing demand in the U.S., the world's largest economy. In electronic trade Thursday in Asia, light, sweet crude for August delivery was trading just above $134 a barrel on the New York Mercantile Exchange, down sharply from a record high above $147 last Friday.

But Takahashi said some investors remained cautious, taking a wait-and-see stance ahead of the release of earning results of U.S. corporate giants later in the day, including Continental Airlines Inc., Microsoft Corp., JPMorgan Chase & Co. and Merrill Lynch & Co.

Japan's top automaker, Toyota Motor Corp., rose 0.9 percent to 4,680 yen. Toyota said Wednesday it was acquiring land in Brazil for a new plant, the latest in the aggressive drive by automakers around the world in emerging markets.

Its rival Honda Motor Co. was unchanged at 3,400 yen.

Sony Corp. jumped 2.3 percent to 4,390 yen. Matsushita Electrical Industrial Co., which sells products under its Panasonic brand, fell 1.4 percent to 2,175 yen.

Banking giant Mizuho Financial Group Inc. soared 4.6 percent to 544,000 yen.