Japan’s Nikkei average jumped nearly 2 percent in active trade on Friday on the back of robust US economic data, and as expectations grew that Greece would secure a long-awaited bailout next week.
But market strategists said the benchmark was unlikely to go much higher over the next trading day or two.
“I do think we have already touched our peak level around 9,400 and the market will likely pare gains for the rest of the day,” said Yutaka Miura, senior technical analyst at Mizuho Securities.
He said the benchmark will likely rally to 9,600 by the end of the month but gains will be capped by profit-taking, adding that he expected a large correction in March.
The benchmark Nikkei was up 1.8 percent at 9,404.89 by the midday trading break, breaching 9,400 for the first time since last August. The climb was in line with strong gains on Wall Street on a four-year low in US new jobless claims and better-than-expected US housing starts.
The Nikkei was above its 200-day moving average near 9,047 and was closing in on its 1-year moving average of 9,426, with trade at nearly 90 percent of its average daily 90-day volume.
The broader Topix index hit a fresh six-month high and gained 1.4 percent to 811.66
Automakers were among the big winners, with Toyota Motor Corp gaining 1.5 percent in heavy trade, while Nissan Motor Co jumped 2.3 percent and Honda Motor Co climbed 2.6 percent.
Japan’s top brokerage Nomura Holdings surged 2.7 percent and construction machinery maker Komatsu rose 3.6 percent.
The Nikkei is up 11.2 percent so far this year, supported by a run of strong economic data out of the United States, as well as the European Central Bank’s massive liquidity injection and further easing steps by the Bank of Japan.
The BOJ move pushed the yen lower, with the dollar last trading at 79.06 yen, near a fresh 3-1/2 month high.
Sentiment has been particularly upbeat this week.
“Although foreign investors have been returning to the market as net buyers for seven weeks in a row, the market hasn’t caught up yet with last year’s massive sell-off so there’s room for Nikkei to aim higher,” said Hideyuki Ishiguro, assistant manager of investment strategy at Okasan Securities.