Tokyo stocks rebounded Monday, as easing fears over escalation in the Middle East spurred buying following heavy selling late last week.
The 225-issue Nikkei Stock Average ended up 370.26 points, or 1.00 percent, from Friday at 37,438.61. The broader Topix index finished 36.14 points, or 1.38 percent, higher at 2,662.46.
On the top-tier Prime Market, gainers were led by electric power and gas, air transportation and land transportation issues.
The U.S. dollar was firm in the upper 154 yen range in Tokyo on prospects the interest rate differential between the United States and Japan will remain wide as the Federal Reserve is expected to keep interest rates elevated amid persistent inflation.
Stocks rose almost across the board after the Nikkei fell over 1,000 points on Friday, as investor concern receded over a potential escalation in the Middle East following reports Iran has no immediate plans to retaliate against an Israeli missile strike.
"There was a sense the market had fallen too far in response" to the Israeli missile attack, said Toshikazu Horiuchi, equity strategist at IwaiCosmo Securities Co.
Among notable gainers were air transportation issues, as the easing Middle East tensions led to a drop in the U.S. benchmark oil contract and fueled hopes for lower oil costs for airlines, analysts said.
But gains in the market were limited as heavyweight semiconductor issues were sold after sharp declines in their U.S. counterparts amid prospects that borrowing costs will remain high in the world's largest economy.
