South Korea's KOSPI reclaimed the 7,000 level on Thursday for the first time in five sessions, supported by institutional buying. Improving sentiment was backed by a calming rise in long-term U.S. yields and strength in semiconductor shares, but gains were limited amid caution ahead of a holiday and U.S. employment data.

The KOSPI closed up 32.39 points, or 0.46%, at 7,003.74. The index last finished above 7,000 on Sept. 23, when it closed at 7,080.92.

The index swung around the 7,000 mark during the session. It gave up earlier gains at one point in the morning, then rebounded as institutional buying came in, settling above 7,000 late in the session.

Institutions were net buyers of 381.4 billion won. Retail investors and foreigners were net sellers of 1.72 trillion won and 143.8 billion won, respectively.

Top market-cap stocks were mixed. Samsung Electronics ended unchanged at 276,000 won, while SK Hynix rose 0.44% to 1,841,000 won.

SK Square gained 0.43%, Samsung Electro-Mechanics rose 1.28%, LG Energy Solution climbed 2.91%, KB Financial Group advanced 0.84%, and Samsung Life Insurance rose 1.76%.

Hyundai Motor fell 0.72%, while Samsung Biologics ended down 4.51%.

The KOSDAQ closed down 1.00 point, or 0.11%, at 893.29. The market posted a modest pullback as profit-taking emerged after a surge of more than 4% a day earlier.

In the Seoul foreign exchange market, the won rose to 1,350.90 per dollar, up 8.60 won from the previous session.

Domestic stocks improved as the rise in U.S. market rates eased and the Philadelphia Semiconductor Index showed strength. Still, the KOSPI's gains were capped as a wait-and-see mood persisted ahead of U.S. September employment data and the domestic holiday.

Han Ji-young (한지영), an analyst at Kiwoom Securities, said dovish comments by the Fed vice chair eased the sharp rise in U.S. rates and that the Philadelphia Semiconductor Index rose in the 1% range. She said some profit-taking emerged on caution ahead of U.S. September employment data and the domestic holiday period, limiting upside momentum.