Japan stocks rise on hopes for economic steps

The benchmark Nikkei 225 stock average gained 138.88 points, or 1.66 percent, to 8,512.27. The broader Topix index rose 0.7 percent to 834.82. During the week, the Nikkei index jumped 7.6 percent.

Seichi Miura, a strategist at Mitsubishi UFJ Securities, said investors were also heartened by a relatively strong showing by European shares Thursday. But the day's modest gains stems mainly from a pullback in selling due to the Thanksgiving holiday in the U.S. rather any major surge in buying, he said.

Investors also seem to be keeping cool over geopolitical instability, including the terrorist attacks in Mumbai, India.

"The market is basically waiting to see how this incident plays out," Miura said. "Right now, it doesn't appear to be a sell or buy factor."

Commodity-related issues were among the day's big winners, benefiting from hopes that demand in China was headed higher after an interest-rate cut in China earlier this week.

In other government moves to shore up weakening economies, the U.S. is rescuing Citigroup Inc. and Japan has cut its key interest rate and announced an economic stimulus plan.

The market didn't seem to be affected by dismal industrial production figures. The government said factory output in October fell a sharp 3.1 percent from the previous month that production was expected to plummet 6.4 percent in November and fall 2.9 percent in December.

Trading house Mitsui & Co. surged 8.32 percent to 846 yen, while Mitsubishi Corp. jumped 6.28 percent to 1,185 yen. Nippon Steel Corp. added 5.32 percent to 297 yen.

High tech issues, however, dragged by a steep fall in shares of Panasonic Corp. after the electronics giant slashed its annual profit forecast by 90 percent Thursday. It plunged 10.9 percent to 1,144 yen.