Japan's Nikkei hits 1-month high on Wall Street gains, weaker yen

Japan's Nikkei share average rose on Monday to touch 39,000 level for first time since late July, helped by a softer yen and Wall Street's gains at end of last week.

Nikkei .N225 h risen 0.2 per cent to 38,709.88 by midday break. It hit its highest since July 31 at 39,080.64 earlier in day before profit-taking started as yen's slide stalled. broer Topix .TOPX was flat at 2,712.56.

Wall Street stocks gained on Friday after fresh economic data raised expectations that U.S. Federal Reserve would cut interest rates modestly in September. U.S. markets are closed on Monday for a public holiday.

dollar gained against yen following latest U.S. economic data, lifting shares of Japanese exporters. FRX/

A softer Japanese currency helps exporters as it increases value of overseas profits in yen terms when firms repatriate m to Japan.

Uniqlo parent and Nikkei heavyweight Fast Retailing 9983.T was last up 0.5 per cent, while Toyota Motor 7203.T edged up 0.9 per cent, Honda Motor 7203.T climbed 1.6 per cent and Mazda 7261.T gained 0.8 per cent.

transport equipment sector .ITEQP.T, which was top performer in early tre, cut gains to finish morning session up 0.8 per cent.

Global stock markets fell sharply early last month on fears of an imminent recession in world' largest economy, but economic data has since buoyed expectations of a soft landing.

Markets remain focused on U.S. labour data though, putting attention this week on weekly unemployment numbers due on Thursday and August non-farm payrolls due on Friday.

Some market participants are still worried about risks of a possible hard landing, "so unless that is dismissed, it will be difficult for Nikkei to exceed 39,000 points and keep rising," said Masayuki Kubota, chief strategist at Rakuten Securities.

Investors will also be monitoring yen's direction as well, he ded.

largest percentage gainer on Nikkei was IHI Corp 7013.T with a rise of 4.5 per cent, followed by Kawasaki Heavy Industries 7012.T, which was up 3.8 per cent, and vantest Corp 6857.T, which climbed 3.2 per cent.