Tokyo: Japan's Nikkei share average broke above 9,600 and hit a seven-month closing high  on Friday, on track for its best February in two decades as strong economic signals drive a global equities rally, although worries are emerging of a looming correction.

Equities have been buoyed by a run of robust economic data out of the US, as well as the European Central Bank's liquidity injection of nearly half a trillion euros and further easing steps by the Bank of Japan and the Bank of England. The Nikkei is up more than 14 per cent so far this year.

Investors and funds are holding off from selling as the rally seems to have further room to run, said Masayuki Otani, chief market analyst at Securities Japan.

"The Nikkei's gains are positive as investors are buying back stocks that were heavily sold off last year and investors are rotating daily through sectors like iron and steel, and financial stocks," he said.

The Nikkei advanced 0.5 per cent to 9,647.38, its highest close since August 4 last year, and gained 2.8 per cent on the week.

Among bluechips, Nippon Steel Corp rose 3.5 per cent, while Sony Corp gained 3 per cent and Honda Motor Co advanced 2.7 per cent.

Banks also outperformed in heavy trade, with Mitsubishi UFJ Financial Group up 1.7 per cent, topping the turnover list, while Mizuho Financial Group gained 2.3 per cent and Sumitomo Mitsui Financial Group was up 1.6 per cent.

Bucking the overall positive trend, Elpida Memory Inc tumbled 4.9 per cent, giving back some of the previous day's 12 per cent rally, after saying it plans to double the number of common shares it can issue as it struggles to meet debt repayment deadlines and turn around its struggling business.

Trading volume on the main board edged up, with 2.55 billion shares changing hands on Friday compared with 2.54 billion shares in the previous session. The broader Topix added 0.6 per cent to 834.29.

While some market participants expect a near-term assault on the closely watched 10,000 mark for the Nikkei, there are also signs that the market may have overshot and is at risk of a correction.

The benchmark Nikkei is deep in "overbought" territory, with the 14-day relative strength index at 81.5. Seventy or above is considered overbought.