The Nikkei rose 0.64 per cent today on gains in shares of Softbank and other firms whose prices were seen as having fallen too far, helping the average recover a little from its worst one-day percentage fall in more than two years.
Analysts said it is still unclear whether the Nikkei has bottomed out after the sell-off that wiped a whopping 103.4 trillion yen ($897.7 billion) off the Tokyo Stock Exchange's first section market value between its high in early April and the close of trade on Tuesday.
"It looks to me like it's a technical rebound following an overdone sell-off here yesterday. Visibility is low on whether US stocks will stop falling and recover," said Yoshinori Nagano, chief strategist at Daiwa Asset Management.
"The rout (in global markets) this month is rooted in the United States, although falls in US stocks have been relatively small compared with falls in other markets," he added.
The Nikkei share average ended the day up 90.96 points at 14,309.56 after falling 4.14 per cent yesterday, which was its biggest one-day loss since May 10, 2004.
The TOPIX index finished 0.54 per cent higher at 1,466.14. Internet and communications conglomerate Softbank jumped 7.1 per cent to 2,490 yen, becoming the biggest contributor to the Nikkei's advance.
Trade was active, with 2.19 billion shares changing hands on the first section, compared with last year's daily average of 2.07 billion shares. Advancers beat decliners by a ratio of more than 2 to