Tokyo investors will be watching for signs of more yen weakness this week after the unit tumbled in response to the U.S. Federal Reserve's decision to wind down its stimulus, sending Japanese shares to a six-year high.
"The weak yen was a major factor behind the recent share price gains," said Hikaru Sato, senior technical analyst at Daiwa Securities.
"There may be profit-taking, but the present bullish sentiment is strong enough to absorb it," Sato added
Investors will also look to a set of Japanese economic indicators due Friday, including November inflation and factory output.
"Heading into the last trading week of the calendar year, the Nikkei could easily break 16,000 if the yen continues to fall," said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.
A weak yen tends to lift shares of major exporters because it makes them more competitive overseas and inflates repatriated profits.
On Friday, the benchmark Nikkei 225 index edged up 11.20 points to 15,870.42, its best finish since December 2007. The index added 3.03% over the week.
The broader Topix index of all first-section shares slipped 1.43 points to 1,261.64 by Friday's close, but it ended the week 1.84% higher.
On Friday, the Nikkei spent most of the day in the red as profit-taking took hold following a three-session rally, but the index punched into the black in the last hour, helped by the weaker yen.
The Tokyo market is closed Monday for a national holiday.
"Many fund managers are now starting to go on holiday, so markets are likely to thin even more next week, which may, in turn, create conditions for more volatility," an equity trading director at a foreign brokerage told Dow Jones Newswires.
The Fed on Wednesday said it would reduce its bond-buying by $10 billion next month to $75 billion, citing a string of upbeat figures that point to a strong recovery.
The news lifted the dollar, while the central bank's faith in the US economy also gave investors a confidence boost. The dollar rose hit a five-year high of 104.58 yen in the afternoon, from 104.22 yen in New York.© (c) 2013 AFP