Japanese stocks diverge from Wall Street, with the Nikkei closing at its highest level in two weeks.

The main Japanese stock index, Nikkei, made further gains for the third consecutive session, closing on Friday at its highest level in two weeks, despite investors becoming cautious with the earnings season kicking off. This was driven by gains from the heavyweight company Fast Retailing within the Nikkei index. In trading, the Nikkei 225 index closed up by 0.6% at 39,605.80, registering a weekly gain of 2.5%, while the broader Topix index ended the week down by 0.2% at 2,706.2 points. Shares of retail company Fast Retailing jumped by 6.1%, making it the biggest gainer among the stocks listed in the Nikkei index, after the company that owns the Uniqlo clothing brand reported record profits for the third consecutive year on Thursday. The significant rise in Fast Retailing’s shares, which is the heaviest among the 225 companies making up the Nikkei, was enough to keep the Nikkei index in positive territory, even though 160 other listed stocks in the index fell, affected by the negative close of US stock indices on Wall Street the previous day. The Nikkei index struggled to approach the 40,000-point level as investors turned cautious broadly in anticipation of a series of earnings results from major companies on Friday and Tuesday, carefully adjusting their positions ahead of the Japanese national holiday on Monday. Among the major losers, shares of SoftBank Group, a key investor in AI-focused startups, fell by about 1%, while shares of telecommunications company KDDI dropped by 1.7%, and renowned automaker Toyota Motor’s shares decreased by 0.7%. Additionally, shares of Japanese retailer Seven & I Holdings declined by 1.4% after the retailer announced on Thursday a roadmap to divest underperforming businesses and focus on its retail operations, aiming to reject a $47 billion acquisition offer from Canadian company Alimentation Couche-Tard.