With Bank of Japan Gov. Masaaki Shirakawa announcing his plan to step down three weeks before this term ends, the battle between the ruling and opposition camps over nominating his successor will only intensify.

With the news, the Nikkei 225 stock average soared 416.83 points. Closing 3.77 percent higher at 11,463.75 points, it was the key market gauge's best finish since Sept. 29, 2008. The broader Topix, which covers all issues on the first section of the Tokyo Stock Exchange, jumped 29.12 points, or 3.10 percent.

Shirakawa, 63, said Tuesday he will step down March 19, the same day the terms of two deputy BOJ governors run out.