Japan shares end at highest level since June on weaker yen

The headline Nikkei index at the Tokyo Stock Exchange closed 0.90 per cent, or 91.23 points, higher at 10,232.33 and the Topix index of all first section shares gained 0.94 per cent, or 8.29 points, to 887.39.

Exporters attracted buying as the yen weakened against other major currencies, brokers said.

The dollar edged up to 83.89 yen in Tokyo afternoon trade from 83.45 yen in New York late Tuesday, and the euro lifted to 110.98 yen from 110.64 yen.

Investors also cheered an agreement between US President Barack Obama and his Republican foes to extend Bush-era tax cuts for all income brackets, including the wealthiest Americans.

"These measures will help to stimulate the US economy significantly," said Okasan Securities strategist Hideyuki Ishiguro.

But gains were limited following sluggish Japanese machinery orders data, an indicator of corporate capital spending, said Yutaka Miura, senior technical analyst at Mizuho Securities.

"There is still some sense of (the market) overheating so it is difficult to bid shares higher from here," he told Dow Jones Newswires.

Online social networking site operator DeNA fell 6.0 per cent on reports the Japan Fair Trade Commission was probing it on suspicion of violating antitrust laws by encouraging developers to not provide their products to rivals.

Among exporters Kyocera was up 1.40 per cent at 8,690 yen.

Daikin Industries was down 4.0 per cent at 2,873 amid speculation regarding its possible acquisition of Goodman Global Group of the United States, a deal that would see it become the world's top maker of air conditioners.

Selling hit the Osaka-based company following a report that it is negotiating a revised proposal to buy Goodman from Hellman & Friedman after its 300-billion-yen ($3.6-billion) bid was rejected.

An analyst at a Japanese brokerage cited concerns over a potential capital boost for Daikin via a new share issuance, given that Daikin holds only about 180 billion yen in cash.