Japan shares closed in the green on Thursday as BOJ Governor Kazuo Ueda reaffirmed the bank's accommodative policy to achieve the 2% inflation target.

The Nikkei 225 rose 1.12%, or 437.63 points, to end at 39,568.06.

Despite a rate hike in July, Ueda pointed out that real interest rates remain negative due to rising inflation expectations.

He warned that the BOJ may need to adjust policy if economic conditions improve and highlighted the importance of monitoring wage growth, particularly in small businesses.

In economic news, Japan's leading economic indicators index rose to 109.1 in October, exceeding both the preliminary estimate and September's 108.9, the highest since July.

This growth was driven by record employment and rising wages.

The coincident index, reflecting current economic conditions, climbed to 116.8, its strongest since May, supported by improved job and income conditions.

The Services Producer Price Index (SPPI) for November showed a 3% year-on-year rise, with a 3.1% increase excluding international transportation.

The rise was driven by higher real estate rental, advertising, and hotel prices, with hotel rates surging 19.1% amid strong domestic travel demand.

In corporate developments, Shionogi & Co (TYO:4507) said it would dissolve its joint ventures with Ping An Insurance Group (HKG:2318, SHA:601318), acquiring the insurer's 49% stakes in Ping An Shionogi and Ping An Shionogi (Hong Kong), making them wholly owned subsidiaries.

JMDC (TYO:4483) revealed an absorption-type merger with its wholly owned subsidiary cotree, effective March 1, 2025, aimed at strengthening its corporate health services.

NIPPON REIT Investment (TYO:3296) completed the transfer of the Shinto GINZA EAST property in Tokyo for 1.69 billion yen through trust beneficiary interests.