TOKYO (Kyodo) -- Tokyo stocks ended slightly higher Monday as buying of technology issues was supported by optimism over the U.S. economy, with growing expectations of further interest rate cuts by the Federal Reserve.

The 225-issue Nikkei Stock Average ended up 69.33 points, or 0.18 percent, from Friday at 39,160.50. The broader Topix index finished 7.34 points, or 0.27 percent, higher at 2,734.56.

The U.S. dollar was firmer with modest gains in late Tokyo trading amid speculation that the Bank of Japan could forgo raising interest rates later this month. But there was no aggressive follow-through buying amid a lack of new trading incentives, dealers said.

At 5 p.m., the dollar fetched 150.33-35 yen compared with 149.99-150.09 yen in New York and 150.09-11 yen in Tokyo at 5 p.m. Friday.

The euro was quoted at $1.0564-0565 and 158.81-85 yen against $1.0560-0570 and 158.37-47 yen in New York and $1.0583-0584 and 158.85-89 yen in Tokyo late Friday afternoon.

The yield on the benchmark 10-year Japanese government bond ended at 1.035 percent, down 0.015 percentage point from Friday's close, as traders bought the safe-haven debt tracking fall in U.S. Treasury yields late last week.

On the stock market, technology shares climbed after the Nasdaq index finished at a record high on Friday, driven by expectations that U.S. high-tech shares could benefit from possible additional monetary easing by the Fed next week.

The market was also bolstered by buying of domestic-demand shares, including game-related stocks, which are less likely to be impacted by yen appreciation even if the BOJ raises interest rates later this month, brokers said.

"Investors were preparing for risks by buying domestic-demand stocks in case the yen gets stronger, which could undermine export shares," said Seiichi Suzuki, chief equity market analyst at Tokai Tokyo Intelligence Laboratory Co.

Meanwhile, the market was top-heavy as investors locked in gains in some heavyweight semiconductor-related issues after recent sharp rises.