Japanese shares rebounded strongly on Thursday following a robust showing on Wall Street and receding worries over the fiscal problems in Europe.
The Nikkei index of the Tokyo Stock Exchange gained 256.09 points, or 2.76 per cent, to 9,535.74. The Topix index of all the first section shares jumped 19.51 points, or 2.32 per cent, to 861.02.
Shares in Japan as well as the rest of Asia rallied after Wall Street closed up 2.82 per cent on optimism ahead of earnings by US financial companies.
"Japanese shares are following gains in overseas markets," Fujio Ando, senior managing director at Chibagin Asset Management, told Dow Jones Newswires.
He added, however, the fundamentals for Japanese stocks had not changed, saying that the market could pull back after short positions had been covered.
Investor sentiment was also buoyed by hopes that soon-to-be released results of "stress tests" could show European banks were in reasonable financial shape.
The Nikkei index could gain further to 10,500 level if the stress test results meet expectations, said Yutaka Shiraki, senior equity strategist at Mitsubishi UFJ Morgan Stanley Securities.
"As jitters over European financials' stress tests wane, excessive market pessimism is starting to fade," he said.
Euro-sensitive shares advanced, including Mazda Motor, which gained 3.92 per cent to 212. Sony rose 4.39 per cent to 2,423.
The dollar's rise to Y88.25 from Y87.80 on Wednesday in New York also boosted exporter shares. Overnight gains in the tech-heavy Nasdaq lifted Japanese high-tech shares.
Toyota Motor rose 2.62 per cent to 3,130. Honda Motor added 3.65 per cent to 2,616.
Toshiba added 2.47 per cent to 457. Panasonic gained 4.71 per cent to 1,178.
