The Nikkei started climbing back up the mountain this week. Mt. Fuji image courtesy Wikimedia Commons.

Japanese investors finished a good week on Friday, as the Nikkei 225 (NIKKEIINDICES:^NI225) rose almost 300 points to close at 18,439. For the week, Friday's move brought the total gain for the Nikkei to more than 700 points, or almost 4%, and many market commentators credited the day's advance to the release of meeting minutes from the Federal Reserve's most recent monetary policy meeting. Yet even though the U.S. central bank contributed to a positive mood in financial markets around the world, some market-specific factors also helped push Japanese stocks higher and could reveal some hints about the likely future course for the Nikkei in the longer run.

Looking for stimulus wherever investors can find it
Two things primarily created the positive mood in Japan. First, the Fed's discussion of monetary policy as revealed in its minutes suggested that the central bank would be in no hurry to make aggressive moves to lift interest rates in the U.S. far above the current level near 0%. That in turn helped to support shares of exporting companies, with carmaker Mazda Motor jumping another 7% and Isuzu rising 5%.

In addition, a big rebound in key commodities helped improve sentiment about beaten-down companies in the metals sector. Toho Zinc rose nearly 9%, and Kobe Steel climbed almost 7% as investors believed that a dramatic gain in oil prices would spill over into the commodity sector more generally. The steel industry in particular also benefited from positive forecasts from analysts, who believed that the success of the Japanese auto industry should help boost demand and add to the competitive advantages that a weak currency brings to steelmakers.

Yet the coming earnings season could still bring some ugly surprises to investors hoping for a big rebound. Yesterday, shares of Fast Retailing dropped more than 9%, as fears about the maker of the Uniqlo brand posting weaker than expected earnings due to a decision to open fewer stores in the U.S. market. The company has a lot of weight in the Nikkei, and its drop created downward pressure on the index equal to about a 1% move.

Overall, Japan's weekly gains were impressive, but they still only represented a portion of the ground that the Nikkei has lost in recent months. It's likely that a sentiment-based tug of war between bullish and bearish investors will last for quite a while as optimists and skeptics alike look for concrete evidence on whether efforts to spur economic growth will ultimately be successful.