TOKYO, Dec. 14 (Xinhua) -- Japan's benchmark Nikkei stock index closed higher Wednesday following Wall Street's gaining overnight, as weaker-than-expected U.S. inflation data raised hopes that the U.S. Federal Reserve could slow the pace of its interest rate hikes.

The 225-issue Nikkei Stock Average added 201.36 points, or 0.72 percent, from Tuesday to close the day at 28,156.21.

The broader Topix index, meanwhile, added 11.74 points, or 0.60 percent, to finish at 1,977.42.

Local brokers said investors' sentiment was lifted by Wall Street's advance overnight after the U.S. consumer price index for November increased 7.1 percent from a year earlier.

This was compared to a 7.7 percent increase in the previous month and was less than median market's expectations, raising the prospect that the Fed could ease back on its aggressive interest rate hikes to combat inflation.

"Investors were relieved after a slower pace of U.S. inflation. But they are still cautious ahead of the Federal Open Market Committee (FOMC) outcome, which could turn the market's course," Shoichi Arisawa, general manager of the investment research department at IwaiCosmo Securities, was quoted as saying.

Market analysts said the latest inflation data could mean that the U.S. central bank may be able to combat inflation with lower interest rates and avoid tipping the world's largest economy into a recession.

"The inflation data led investors to believe that the Fed may be able to pull off a soft landing for the U.S. economy. Investors snapped up economically-sensitive stocks on expectations that the U.S. economy will not tank," Makoto Sengoku, senior equity market analyst at Tokai Tokyo Research Institute, was quoted as saying.

By the close of play, textile and apparel, mining, and precision instrument issues comprised those that gained the most.

Heavily weighted technology issues found favor, with chipmaking equipment maker Tokyo Electron advancing 1.9 percent and semiconductor silicon wafer maker Shin-Etsu Chemical climbing 3.0 percent.

Air-conditioning maker Daikin Industries, meanwhile, gained 1.2 percent.

Export-oriented issues came under pressure owing to the yen's rise against the U.S. dollar, with Hino Motors dropping 1.7 percent and Mitsubishi Motors falling 3.8 percent.

Issues that rose outpaced those that fell by 1,258 to 493, while 85 ended the day unchanged.

On the Prime Market on Wednesday, 985.58 million shares changed hands, rising from Tuesday's volume of 968.68 million shares.

The turnover on the third trading day of the week came to 2,491.73 billion yen (18.41 billion U.S. dollars). Enditem

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