This file photo shows the Tokyo Stock Exchange on Oct. 2, 2020. (Mainichi)

       TOKYO (Kyodo) -- Tokyo stocks rose Friday, with the benchmark Nikkei index ending at a seven-month high, as hopes grew stronger for new economic measures to bolster recovery of the pandemic-hit domestic economy under the next government.

       The 225-issue Nikkei Stock Average ended up 373.65 points, or 1.25 percent, from Thursday at 30,381.84, its highest close since Feb. 16. The broader Topix index of all First Section issues on the Tokyo Stock Exchange finished up 26.72 points, or 1.29 percent, at 2,091.65, a 31-year high.

       Gainers were led by securities house, retail, consumer credit and chemical issues.

       The U.S. dollar was firmer in the upper 109 yen zone following a weaker tone in New York overnight, dealers said.

       At 5 p.m., the dollar fetched 109.94-96 yen compared with 109.68-78 yen in New York and 109.95-96 yen in Tokyo at 5 p.m. Thursday.

       The euro was quoted at $1.1842-1843 and 130.19-23 yen against $1.1819-1829 and 129.68-78 yen in New York and $1.1822-1823 and 129.99-130.03 yen in Tokyo late Thursday afternoon.

       The yield on the benchmark 10-year Japanese government bond rose 0.005 percentage point from Thursday's close to 0.040 percent, as investors sold the safe-haven debt following higher Tokyo stocks. Bond yields move inversely to prices.

       The market is increasingly focused on what economic measures could be launched, as more lawmakers are announcing their bids in the ruling Liberal Democratic Party's leadership race to succeed Prime Minister Yoshihide Suga. Suga said last week he would not seek re-election.

       Taro Kono, the minister in charge of Japan's vaccination efforts, announced his candidacy in the Sept. 29 race after the end of regular trading. He follows former Foreign Minister Fumio Kishida and former communications minister Sanae Takaichi in joining the race.

       Market participants hope that whoever takes over the party's top post will compile a drastic economic stimulus package ahead of an all-important general election this fall. The LDP leader serves as prime minister as the party controls the House of Representatives.

       "Overseas investors are re-evaluating Japanese stocks as their hopes grow that the political upheaval will change Japan's policies significantly and turn around the economic fallout" from the coronavirus pandemic, said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities Co.

       The market saw an additional boost from news that U.S. President Joe Biden and Chinese President Xi Jinping had held phone talks, agreeing to engage in areas where they both agree and disagree.

       The leaders' talks helped ease concerns about tensions in the world's two largest economies, Fujito added.

       On the First Section, advancing issues outnumbered decliners 1,923 to 222, while 44 ended unchanged.

       Retail and service issues rose on expectations that consumer spending would be lifted if the next government compiles an economic stimulus package.

       Retailer Aeon rose 62 yen, or 2.0 percent, to 3,137 yen, and staffing service provider Recruit Holdings climbed 226 yen, or 3.3 percent, to 6,987 yen.

       SBI Holdings jumped 214 yen, or 7.6 percent, to 3,020 yen after the online financial conglomerate said Thursday it aims to boost its stake in Shinsei Bank to 48 percent from the current about 20 percent through a tender offer with an offer price of 2,000 yen a share, nearly a 40 percent premium to Thursday's closing price.

       Shinsei Bank shares ended at a daily limit high of 1,740 yen, up 300 yen, or 20.8 percent.

       Trading volume on the main section rose to 1,486.00 million shares from Thursday's 1,260.35 million shares.

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