Tokyo stocks bounced back from a sell-off the previous day, with sentiment boosted by receding fears that interest rate cuts in the United States would be later than earlier expected amid signs of economic resilience.
The 225-issue Nikkei Stock Average ended up 321.29 points, or 0.81 percent, from Wednesday at 39,773.14. The broader Topix index finished 25.49 points, or 0.94 percent, higher at 2,732.00.
On the top-tier Prime Market, gainers were led by nonferrous metal, mining, and electric power and gas issues.
The U.S. dollar moved little in the upper 151 yen range as traders remained cautious about a possible yen-buying intervention by Japanese authorities following the currency's recent weakening, dealers said. The government last intervened in October 2022 as the yen inched near the 152 level.
The Nikkei briefly surged 2 percent above the 40,000 mark after closing at a three-week low the previous day, primarily driven by gains in semiconductor-related stocks after the U.S. Nasdaq index advanced overnight.
The market was supported by rekindled hopes that the U.S. Federal Reserve may start reducing interest rates in June after Fed Chair Jerome Powell said Wednesday that central bank officials expect to lower the policy rate this year, according to Yutaka Miura, senior technical analyst at Mizuho Securities Co.
Powell's remarks came as stronger-than-expected economic data released recently in the world's largest economy fueled speculation that a rate cut could be later than June, the timing earlier expected by many participants.
"Diminishing concerns over potential delays in U.S. interest rate cuts also contributed to the market's rally," Miura said.
Shares trimmed some of the gains toward the end of the market closing, with investors retreating to the sidelines to await the U.S. March jobs data due Friday, analysts said.
