TOKYO (Kyodo) -- Tokyo stocks ended slightly higher Wednesday as defense-related shares were boosted by news that the government plans to start increasing taxes in 2026 to help cover the nation's defense budget.

The 225-issue Nikkei Stock Average ended up 4.65 points, or 0.01 percent, from Tuesday at 39,372.23. The broader Topix index finished 7.90 points, or 0.29 percent, higher at 2,749.31.

On the top-tier Prime Market, gainers were led by insurance, bank, and textiles and apparel shares.

The U.S. dollar was directionless, mostly staying in the upper 151 yen zone in Tokyo, as investors refrained from active trading ahead of key U.S. inflation data due later in the day, dealers said.

At 5 p.m., the dollar fetched 151.65-68 yen compared with 151.92-152.02 yen in New York and 151.55-57 yen in Tokyo at 5 p.m. Tuesday.

The euro was quoted at $1.0489-0491 and 159.08-12 yen against $1.0522-0532 and 159.90-160.00 yen in New York and $1.0548-0549 and 159.86-90 yen in Tokyo late Tuesday afternoon.

The yield on the benchmark 10-year Japanese government bond rose 0.005 percentage point from Tuesday's close to 1.065 percent as the debt was sold tracking the rise in long-term U.S. Treasury yields.

On the equities market, defense-related stocks were sought following reports that the Japanese government is seeking to raise corporate and tobacco taxes from April 2026 and income taxes from 2027 to help cover the cost of its plan to nearly double the defense budget.

But the market remained top-heavy throughout the day as heavyweight semiconductor-related shares dropped, tracking overnight losses on their U.S. counterparts, analysts said.

Investors were also cautious ahead of the monetary policy meetings of the Bank of Japan and the Federal Reserve next week, with the upcoming U.S. consumer price index data likely to influence the U.S. central bank's decision.

"The market was directionless as investors were taking a wait-and-see stance ahead of the CPI data, trying to find small cues to invest or sell," Toshikazu Horiuchi, equity strategist at IwaiCosmo Securities Co., said.