TOKYO, Jan. 20 (Xinhua) -- Tokyo stocks ended higher Monday, with the benchmark Nikkei stock index closing at a 16-month high, as Wall Street's climb to record highs late last week on robust housing starts data for December bolstered sentiment here.
The 225-issue Nikkei Stock Average added 42.25 points, or 0.18 percent, from Friday to close the day at 24,083.51.
The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, gained 8.72 points, or 0.50 percent, to finish at 1,744.16.
Local brokers said that investors primarily took their cues from U.S. shares advancing to record highs late last week, bolstered by U.S. data showing that housing starts data for December came in well ahead of median market expectations.
Market analysts here highlighted that the housing starts figures released by the U.S. Census Bureau on Friday, marked the highest level since December 2006 and underpinned the market consensus that the U.S. Federal Reserve's rate cuts had helped solidify the U.S. housing market.
"Improvement in U.S. economic conditions is the main force behind Japanese shares' recent rally," Shingo Ide, chief equity strategist at the NLI Research Institute, was quoted as saying.
The yen eased against the U.S. dollar on hopes for a continued expansion of the U.S. economy and ahead of corporate earnings season here, which gave exporters, reliant on a weaker yen to boost profits when repatriated, a lift, analysts said.
But some investors still hedged on the side of caution and opted to lock in recent gains amid no other major economic indicators and ahead of the outcome of the Bank of Japan's (BOJ) two-day policy setting meeting set to conclude Tuesday, investment strategists said.
Housing-related shares found favor, tracking their U.S. peers higher, with Daikin Industries climbing 2.0 percent by the close, while window glass making firm AGC closed the day 2.3 percent higher.
Chip-related issues were helped by the yen's softer tone versus the U.S. dollar and eased geopolitical concerns in the Middle East.
Cyclical issues, including chip-linked stocks are highly susceptible to external factors stemming beyond macroeconomics, local market analysts highlighted.
As such, Nidec gained 2.8 percent, while Taiyo Yuden jumped 3.2 percent. Disco, meanwhile, ended the day 2.8 percent higher.
By the close of play, electric power and gas, and machinery-linked issues comprised those that gained the most, and issues that rose outpaced those that fell by 1,478 to 579 on the First Section, while 103 ended the day unchanged.
On the main section on Monday, 821.12 million shares changed hands, dropping from Friday's volume of 1,079.35 million shares.
The turnover on the first trading day of the week came to 1,417.9 billion yen (12.87 billion U.S. dollars).
