Share prices in Tokyo closed 1.3 per cent higher today on bargain-hunting with the yen's slump giving a further boost to exporters.
The Tokyo Stock Exchange's Nikkei-225 index gained 176.12 points to finish at 13,867.61.
Tokyo was alone among major markets yesterday in failing to derive any benefit from the US Federal Reserve's surprise decision to cut interest rates to support the faltering US economy.
"Investors saw that share prices were looking attractive after they went lower yesterday," said Mr Masakazu Kimura, head of equities at Tsubasa Securities in Tokyo.
"Today's market started slowly with players treading cautiously after seeing yesterday's falls," he added.
Exporters gained as the yen fell below 116 to the dollar for the first time since July 1999 amid growing gloom over Japan's economic recovery.
A weak yen makes Japanese products more competitive overseas and increases exporters' repatriated income.
"Investors are feeling optimistic about corporate earnings thanks to the weak yen," one dealer said.
Among leading exporters Sony gained 370 yen or 4.5 per cent to 8,600 yen and Japan's top computer maker Fujitsu rose 57 yen to 1,760 yen.
But companies more reliant on domestic demand suffered from the fears surrounding the Japanese economy after a glut of recent data suggested another downturn.
Tokyo Electric lost 70 yen to 2,800 yen and department store operator Isetan fell 11 yen to 1,207 yen.
AFP