Traders remained cautious ahead of the release of US consumer price inflation data later today, which could have a significant impact on the outlook for interest rates.
The benchmark Nikkei 225 Index is up 2.72 points or 0.01 percent to 26,448.72, after touching a high of 26,547.61 and a low of 26,381.93 earlier. Japanese stocks closed significantly higher on Wednesday.
Market heavyweight SoftBank Group is edging up 0.5 percent, while Uniqlo operator Fast Retailing is losing more than 1 percent. Among automakers, Toyota is gaining more than 1 percent, while Honda is edging down 0.4 percent.
In the tech space, Screen Holdings and Tokyo Electron are gaining almost 2 percent each, while Advantest is adding almost 1 percent.
In the banking sector, Mitsubishi UFJ Financial is gaining more than 3 percent, Mizuho Financial is adding more than 4 percent and Sumitomo Mitsui Financial is advancing almost 4 percent.
Among the major exporters, Mitsubishi Electric and Canon are losing almost 1 percent each, while Panasonic is gaining almost 2 percent and Sony is edging up 0.3 percent.
Among the other major losers, Eisai is losing more than 3 percent.
Conversely, Pacific Metals is gaining more than 5 percent and Mitsui Mining & Smelting is adding more than 4 percent, while Sumitomo Metal Mining and Dowa Holdings are advancing more than 3 percent each. Nidec and Fukuoka Financial Group are advancing almost 3 percent each.
In economic news, Japan posted a current account surplus of 1,803.6 billion yen in November, the Ministry of Finance said on Thursday - up 16.4 percent on year. That beat expectations for a surplus of 471 billion yen following the 64.1 billion yen deficit in October. Exports were up 20.7 percent on year at 9.008 trillion yen and imports jumped an annual 33.8 percent to 10.546 trillion yen for a trade deficit of 1.537 trillion yen.
Overall bank lending in Japan was up 2.7 percent on year in December, the Bank of Japan said on Thursday - coming in at 596.525 trillion yen. That was in line with expectations and unchanged from the November reading. For the fourth quarter of 2022, overall lending was up 2.7 percent on year.
In the currency market, the U.S. dollar is trading in the higher 131 yen-range on Thursday.
On Wall Street, stocks showed a strong move to the upside over the course of the trading session on Wednesday, extending the upward move seen on Tuesday. With the continued advance, the major averages reached their best closing levels in almost a month.
The major averages saw further upside going into the close, ending the day at their highs of the session. The Dow climbed 268.91 points or 0.8 percent to 33,973.01, the Nasdaq surged 189.04 points or 1.8 percent to 10,931.67 and the S&P 500 jumped 50.36 points or 1.3 percent to 3,696.61.
The major European markets also moved to the upside on the day. While the German DAX Index jumped by 1.2 percent, the French CAC 40 Index advanced by 0.8 percent and the U.K.'s FTSE 100 Index rose by 0.4 percent.
Crude oil prices rose sharply Wednesday on hopes for a global economic recovery and the possible impact of sanctions on Russian crude output. West Texas Intermediate crude oil futures for February jumped $2.29 or 3.1 percent at $77.41 a barrel, rising for a fifth straight session.