The benchmark Nikkei 225 index gained 33.74 points, or 0.24 percent, to 14,012.20.
"The market closed higher following yesterday's rise on Wall Street, while a fall in oil prices prompted some buying," said Tsuyoshi Segawa, a strategist at Shinko Securities Co. Ltd.
The July crude contract on the New York Mercantile Exchange hit a record over $135 a barrel on Thursday before later falling back around $4. In electronic trading, the July crude oil contract on Nymex was around $131.80 a barrel midafternoon in Singapore.
But some stock investors were cautious as they expected the dip in oil prices to be temporary, Segawa said.
Among gainers, major drug maker Chugai Pharmaceutical Co. Ltd. rose 2.8 percent to 1,640 yen after Swiss pharmaceutical firm Roche Holding AG said it would boost its stake in the Japanese company to 59.9 percent from 50.1 percent.
Sony Corp. rose 0.2 percent to 5,040 yen. Hitachi Ltd. gained 1.5 percent to 719 yen.
The Topix index of all issues on the Tokyo Stock Exchange First Section lost 0.2 percent to 1,376.69.
In currency trading, the dollar was quoted at 104.06 yen midafternoon in Tokyo, down from 104.14 yen late Thursday in New York. The euro stood at $1.5738, compared with $1.5724 in New York.
Moody's Corp's (MCO.N) credit rating unit
Moody's Investors Service switched analysts from covering deals
of particular investment banks after the banks requested
changes, the Wall Street Journal said on Friday, citing people
familiar with the matter.
An analyst in a group that rated collateralized debt
obligations was moved off an investment bank's deals after
bankers requested an analyst who raised fewer questions about
their deals, the newspaper said.
Moody's also moved another investment banking official to
its surveillance unit, which monitors the performance of deals
already rated, after an official agreed with an investment
banker's opinion that the analyst was too fussy, the newspaper
Moody's did not immediately return a call seeking comment.
According to the newspaper, Moody's and Fimalac SA's
(LBCP.PA) Fitch Ratings acknowledge they have switched analysts
who rate bonds after issuers or bankers asked that they do so.
Standard & Poor's, a unit of McGraw-Hill Cos (MHP.N), also
made sporadic analyst changes following complaints from bond
issuers, the newspaper said, citing a person familiar with the
situation. S&P recently began rotating some analysts.
S&P could not be immediately reached for comment.
Moody's, S&P and Fitch are paid by issuers for the
securities they rate, and critics regularly question the
conflict of interest they say this arrangement poses for the
Earlier this decade, major U.S. investment banks separated
their research and investment banking operations, under
pressure from regulators. The separation was designed to ensure
that analysts would not be pressured to view companies more
favorably so that their employers could win investment banking
Shares of Moody's have fallen 23 percent in the last two
days, closing at $34.51 on Thursday on the New York Stock
The decline followed a report that a computer error led
Moody's to wrongly assign "triple-A" ratings to complex
European debt products called constant proportion debt
obligations, but that it might have changed how it assessed
those securities to avoid having to downgrade them.
U.S. investor Warren Buffett, whose Berkshire Hathaway Inc
insurance and investment company (BRKa.N) (BRKb.N) holds close
to a 20 percent stake in Moody's, said on Thursday that anyone
found responsible for wrongdoing should leave Moody's.
(Reporting by Ajay Kamalakaran; Editing by Louise Ireland)
U.S. home prices fell a record 1.7
percent in the first quarter and the number of workers on
jobless benefit rolls held at a four-year high, underscoring
the economy's woes, data on Thursday showed.
The continued slump in housing prices in the first quarter
pushed them 3.1 percent below their year-ago level, the Office
of Federal Housing Enterprise Oversight said. Like the
quarter-to-quarter drop, the decline was the biggest in the 17
years the housing regulator has tracked the data.
OFHEO said prices fell 0.4 percent in March from February
and are now down 3.7 percent from their April 2007 peak. Other
home price measures have shown even steeper declines.
A separate report from the Labor Department showed
first-time claims for state unemployment benefits unexpectedly
fell 9,000 last week to 365,000.
However, the number of workers still on the benefit rolls
after drawing an initial week of aid held at 3.073 million in
the week ended May 10, the latest for which figures were
available. The last time so-called continued claims were higher
was in March 2004.
"The data tends to support our call of a move in the
unemployment rate to 5.5 percent," said Joseph Brusuelas, chief
economist for Merk Investments in New York. The jobless rate
stood at 5 percent in April.
Prices for U.S. government bonds fell, however, as traders
saw the surprise drop in initial claims as a sign of labor
market resilience and as oil prices surged to a fresh record
above $135 per barrel.
Stock prices also rose, helped by the data and news of a
proposed major acquisition in the utilities sector.
The plunging housing sector and tighter credit conditions
have pushed the economy to the edge of, if not into, recession.
On Wednesday, the Federal Reserve released updated economic
forecasts that showed policy-makers expect the economy to grow
just 0.3 percent to 1.2 percent this year. That marked a sharp
downward revision from the 1.3 percent to 2 percent forecast
issued three months ago
Fed officials now expect the unemployment rate to average
5.5 percent to 5.7 percent in the fourth quarter.
Continued claims for jobless benefits have held above the 3
million mark for four straight weeks, a sign of the
difficulties workers face getting back on the payrolls.
While initial filings dipped last week, a four-week average
of new claims, a more reliable guide to underlying labor trends
because it irons out weekly volatility, rose to 372,250 from
367,250 in the previous week
"Over the next few months claims should climb toward the
400,000 mark, as companies seek to control costs in the face of
persistent very soft demand," said Ian Shepherdson, chief U.S.
economist for High Frequency Economics in Valhalla, New York.
"Expect volatility over the next couple of weeks as a
result of Memorial Day seasonals, and then look for claims to
spike in early July," Shepherdson said.
The Senate on Thursday approved a Democratic initiative to
extend the duration of jobless benefits to the long-term
unemployed. Last week, the House of Representatives approved
similar legislation, which faces opposition from President
George W. Bush.
(Additional reporting by Al Yoon, Steven C. Johnson,
Richard Leong and John Parry in New York; Editing by Andrea