Japan's Nikkei average rose 0.9 percent on Thursday as higher oil prices pushed up energy stocks and trading firms, while TDK Corp gained on its plan to buy Thai-based Magnecomp Precision Technology.

Tokyo Electron Ltd rose on a report it would post strong earnings, while trading house Mitsui & Co Ltd advanced after saying it had won an order to build a diesel oil plant in Egypt.

Trade was thin with 1.5 billion shares changing hands, compared with a daily average volume of 2.1 billion shares in July, reflecting the absence of foreign investors, said Soichiro Monji, chief strategist in the equity management department of Daiwa SB Investments.

There will be key events in September such as a U.S. Federal Reserve policy meeting and earnings from U.S. brokerage houses. We need to see if the market can ride out all these events, he said.

The Nikkei has so far recouped only 45 percent of the losses it booked during the sharp sell-off earlier this month, and the Nikkei is trading at a forecast PE of 17, getting close to 15 for U.S. stocks, Monji said.

It looks like the valuation gap between Japanese stocks and U.S. stocks is narrowing, he added.

The benchmark Nikkei ended 140.99 points higher at 16,153.82, while the broad TOPIX index gained 0.7 percent to 1,568.23.

Advancing stocks beat declining ones by a ratio of more than two to one.

TDK UP

In the technology sector, TDK rose 3.6 percent to 9,390 yen after it said on Wednesday it would buy 74.3 percent of Magnecomp Precision Technology for $123 million.

Tokyo Electron gained 2 percent to 8,020 yen after the Nikkei business daily reported the firm would likely post a 42 percent jump in group net profit in the first half to the end of September on growing sales to chipmakers in Asia.

U.S. crude oil futures rose above $73 a barrel on Wednesday, helping Nippon Oil Corp, Japan's largest oil refiner, add 4.3 percent to 937 yen.

Mitsui & Co shares were up 1.4 percent at 2,260 yen after the trading house said on Thursday it and South Korean construction firm GS Engineering & Construction Corp have jointly won a $1.8 billion order to build a diesel oil plant in Egypt.

After the market closed, Toshiba Corp said that it would sell a 13.3 percent stake in Toshiba Machine Co Ltd for about 20 billion yen.

Tokyo Broadcasting System jumped 5.2 percent to 3,430 yen after Deutsche Securities lifted its rating on the stock to hold from sell and boosted its target price to 3,300 yen from 2,550.

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