TOKYO (Kyodo) -- Tokyo stocks rose Thursday as market sentiment improved on hopes for progress in containing the eurozone debt crisis, lifting the Nikkei index to a four-week closing high.

The 225-issue Nikkei Stock Average ended up 84.35 points, or 0.97 percent, from Wednesday to 8,823.25, closing at the highest level since Sept. 16. The broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 5.39 points, or 0.72 percent, higher at 758.83.

Gainers were led by the securities sector, followed by the nonferrous metals and real estate sectors. Decliners included the electricity and gas, pulp and paper, and land transport sectors.

Market sentiment brightened after European Commission President Jose Manuel Barroso set out proposals to oblige European banks to boost their capital bases, including a plan not to allow banks to pay out dividends to investors or bonuses to employees unless they meet the obligation to raise their capital, brokers said.

"Although it will still require time to settle the crisis, Barroso's proposals showed that the authorities are moving in the right direction," said Toshikazu Horiuchi, equity strategist at Cosmo Securities Co.

Yutaka Miura, senior technical analyst at Mizuho Securities Co., said however that further gains in stocks are capped as there is a limit to advances based just on expectations of policy actions.

"There must be a decision on concrete measures to spur buying momentum," Miura said.

The slide of the yen both against the euro and the U.S. dollar also prompted investors to buy export-linked shares. The dollar hovered above the 77 yen line, up from the upper 76 yen level the previous day in Tokyo, and the euro traded in the lower 106 yen level compared with the upper-104 range Wednesday afternoon.

Among such exporters, Sony rose 45 yen, or 3.0 percent, to 1,562 yen, shrugging off a report of another cyberattack on its PlayStation Network and other online entertainment services.

Machine tool-related shares were higher with Toshiba Machine rising 10 yen, or 2.8 percent, to 366 yen and Makino Milling Machine climbing 11 yen, or 2.1 percent, to 525 yen after the Japan Machine Tool Builders' Association said machine tool orders for September topped 100 billion yen for the first time in two months.

Mitsui Fudosan rose 35 yen, or 2.9 percent, to 1,265 yen after the Real Estate Economic Institute said new condominium supply in Tokyo and three neighboring prefectures in September increased 16.7 percent from a year earlier to 3,713 units, the first double-digit year-on-year growth in seven months.

On the First Section, advancing stocks outnumbered declining ones 855 to 667, with 142 others remaining unchanged.

Trading volume on the main section edged up to 1,578.51 million shares from Wednesday's 1,524.53 million.