The Nikkei stock index surged 2 percent Wednesday led by heavyweight technology issues, lifted by gains on Wall Street and hopes for upbeat earnings from major U.S. companies later this week.
The 225-issue Nikkei Stock Average rose 777.23 points, or 2.07 percent, from Tuesday to 38,329.39. The broader Topix index was up 36.45 points, or 1.37 percent, at 2,702.68.
The U.S. dollar moved little in the upper 154 yen range after hitting a new 34-year high of 154.88 yen in New York overnight, as traders look for further cues from U.S. economic data later this week and the result Friday of the Bank of Japan's policy meeting.
At noon, the dollar fetched 154.79-82 yen compared with 154.78-88 yen in New York and 154.81-82 yen in Tokyo at 5 p.m. Tuesday.
The euro was quoted at $1.0710-0711 and 165.78-83 yen against $1.0698-0708 and 165.62-72 yen in New York and $1.0676-0678 and 165.28-32 yen in Tokyo late Tuesday afternoon.
On the stock market, semiconductor issues drew buying after U.S. tech firms including Texas Instruments Inc. released strong earnings, raising hopes for positive results later this week from Meta Platforms Inc. and other major companies, analysts said.
"The Nikkei's performance today was stronger than expected," said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co. "It appears that recent drops in technology shares were an adjustment after quick surges and we are now seeing such a move coming to an end."
