Nikkei above 35,000: Japan's Nikkei share average soared to its highest level since February 1990 on Thursday. Boosted by a weakened yen supporting exporters and diminishing concerns about an imminent Bank of Japan (BOJ) hike due to weak wage data, the Nikkei exhibited an impressive 1.94 per cent surge, reaching 35,110.52 by mid-day close.

Marking its third consecutive day of gains, the index is poised for its most substantial weekly rise since late March 2020. The broader Topix also reflected this positive momentum, registering a 1.81 per cent increase at 2,488.65.

Analysts attribute the recent market dynamics to a combination of factors, including the aftermath of a strong earthquake in western Japan last week and discouraging data on wage growth. Tony Sycamore, a market analyst at IG, stressed that the weak wage growth figures compelled market participants to reassess the timeline for the BOJ to normalise its monetary policy.

The latest data revealed a 20th consecutive monthly contraction in workers' real wages in November, contrary to officials' aspirations for wage gains before considering policy tightening. Sycamore noted that this wage data provided the Nikkei with an opportunity to surge toward the 35,000 level, suggesting the index could continue its upward trajectory as the market gauges the BOJ's potential next steps.

The yen's 0.9 per cent decline against the US dollar overnight, landing around 145.56 per dollar in morning trade, further contributed to the Nikkei's ascent. A weaker yen traditionally supports exporter shares, as it enhances the value of overseas profits when repatriated to Japan.

Japan's stocks received an additional boost from a positive day on Wall Street, where megacaps experienced a rally. Notable performers on the Nikkei included SMC Corp, Itochu Corp, and Hitachi Ltd, while Yamato Holdings, Rakuten Group, and Shiseido faced marginal declines.

With 202 advancers against 23 decliners on the Nikkei index, the market sentiment remains overwhelmingly positive, reflecting the current bullish trend.

(With Reuters inputs)