Tokyo stocks rebounded for the first time in three trading days on Tuesday, boosted by optimism about the U.S. economy amid hopes for sooner-than-expected interest rate cuts by the Federal Reserve and a weaker yen against the U.S. dollar.
The 225-issue Nikkei Stock Average ended up 599.03 points, or 1.57 percent, from Thursday at 38,835.10. Japanese financial markets were closed Friday and Monday for national holidays. The broader Topix index finished 17.69 points, or 0.65 percent, higher at 2,746.22.
On the top-tier Prime Market, securities house, machinery and service issues were among the gainers.
The dollar strengthened to the mid-154 yen range in Tokyo as some traders sold the yen on expectations that the differential between U.S. and Japanese interest rates will remain wide even if the Fed moves to reduce its benchmark rate later this year, dealers said.
Shares were higher from the opening, led by high-tech issues that tracked gains in their U.S. counterparts on the prospect of lower borrowing costs and export-related issues, which were lifted by the weaker yen.
Market sentiment improved after softer-than-expected U.S. labor market data released late last week eased concerns that the Fed will delay or forgo interest rate cuts this year amid persistent inflation, brokers said.
"Concerns had grown that there would be no rate cuts this year, but the latest data revived expectations for one or two reductions within the year," helping to boost stock markets in the United States and Japan, said Yutaka Miura, senior technical analyst at Mizuho Securities Co.
