Japanese shares closed higher on Thursday, as investors were selective and scooped up stocks that were undervalued relative to their latest outlooks, while concerns over the impact of rising costs hurt risk appetite. The Nikkei share average rose 0.59% to close at 29,277.86, after losing as much as 0.2% to track overnight weakness on Wall Street earlier in the session. The broader Topix rose 0.32% to 2,014.30. Wall Street closed sharply lower overnight as surging consumer prices curbed investor risk appetite, and stoked worries of a protracted wave of red hot inflation. “Investors bought shares whose prices proven undervalued relative to their latest outlook. We have been seeing a clear contrast in stock prices between those with strong earnings and those without,” said Ikuo Mitsui, fund manager at Aizawa Securities. “But we can’t see any sign for the end of the global trend of rising costs in materials and transportation, which have been weighing on the investor sentiment.” Toppan Printing surged 8.11% after the printing company raised its annual outlook. Showa Denko, too, rose 6.93%, as the industrial materials maker returned to profit. Pacific Metals surged 17.09%, after an influential activist fund disclosed its holdings in the manufacture of ferronickel. On the other hand, cosmetics maker Shiseido and brewery Asahi Group Holdings fell 3.83% and 3.94%, respectively, after cutting their annual profit outlook. Pan Pacific International Holdings tanked 9.59% after the operator of discount stores’ outlook missed market expectations. Fanuc Corp, up 3.67 %, gained the most among the top 30 core Topix names, followed by Daiichi Sankyo. The underperformers among the Topix 30 were Seven & i Holdings Co, which fell 1.19%, followed by Honda Motor , losing 0.67%. (Editing by Shailesh Kuber)