In addition, after major initial public offerings in the past week, the supply and demand balance in Japan has improved, analysts said.
The market has recovered from modest selling in the past week, when the government surprised investors by announcing economic contraction for the last quarter of 2004 and revising down the previous quarter into negative growth.
The result was a mild recession for the world's second-largest economy for most of 2004, but many economists painted a rosier growth picture for this year and investors had turned more optimistic by the end of the week.
However, investors will keep a close watch on the release Wednesday of the minutes of a meeting of the Federal Open Market Committee (FMOC), the US central bank's policy-setting body.
For the coming week, both Sumitani and Sato forecast the benchmark Nikkei-225 index should move between 11,500 and 11,800, possibly toward the top end of the range.
For the week to February 18, the Nikkei-225 index gained 106.56 points or 0.92 percent to 11,660.12. The broader TOPIX index of all First Section shares rose 5.87 points or 0.51 percent to 1,166.57
Average daily volume was 1.51 billion shares, down from 1.83 billion shares the previous week. Average daily turnover by value was 1.27 trillion yen (12.1 billion dollars), down from 1.33 trillion yen.
Among the techs, Fujitsu was up 24 yen or 3.73 percent at 667 yen and NEC gained 31 yen or 4.98 percent to 654 yen.
Automakers were mixed. Toyota Motor was up 10 yen or 0.24 percent at 4,170 yen and Honda Motor gained 200 yen or 3.68 percent to 5,640 yen. But Nissan Motor slipped two yen or 0.18 percent to 1,131 yen.
Mizuho Financial Group gained 5,000 yen or 0.99 percent to 508,000 yen while Mitsubishi Tokyo Financial Group lost 26,000 yen or 2.63 percent to 963,000.
Sumitomo Mitsui Financial Group was down 2,000 yen or 0.28 percent to 715,000 yen.