The Nikkei share average in Japan notched its second consecutive weekly gain, benefiting from a rebound on Wall Street following encouraging US economic data, which reinforced the notion of a "soft landing" for the world's largest economy. 

The Nikkei settled 0.09 per cent higher at 33,169.05 on Friday, translating to a 0.6 per cent increase for the week.

Earlier in the day, the index had surged by 0.71 per cent, buoyed by gains in US chip shares. However, these gains were short-lived, with Tokyo Electron finishing 0.83 per cent higher, while Advantest reversed its initial 1.9 per cent jump to close down 1.07 per cent.

Bank stocks, recovering from losses incurred after the Bank of Japan's decision to maintain its yield-suppressing stimulus without providing hints about an exit strategy, bolstered the market. 

The Tokyo Stock Exchange's banking index surged 2.44 per cent, ranking second among the 33 industry groups. Meanwhile, the shipping sector emerged as the top performer, jumping 3.26 per cent in response to the recent Red Sea attacks.

The broader Topix, with a lower concentration of tech shares, gained 0.45 per cent. Within the Topix, the value share subindex outpaced the growth share subindex, posting a 0.66 per cent rise compared to 0.24 per cent.

Nomura Securities strategist Kazuo Kamitani highlighted the positive domestic macroeconomic conditions supporting the market. 

Anticipation of upcoming spring wage negotiations driving salary increases that outpace inflation, coupled with optimism for a shift to favourable inflation, contributed to the Nikkei's rise.

Data revealed that Japan's core consumer prices increased at their slowest pace in over a year, indicating a moderation in cost-push pressures.

Additionally, Japan's equity markets, in contrast to most global markets, will remain open on Monday, December 25, to react to the awaited US Personal Consumption Expenditures (PCE) index, the Federal Reserve's preferred measure of inflation.

(With Reuters Inputs)