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Tokyo stocks bounced back Monday, reflecting investors’ sigh of relief over some calm that returned to the U.S. Treasury bond market.

The 225-issue Nikkei average gained 697.49 points, or 2.41%, to finish at 29,663.50, returning above the 29,000 line after plummeting 1,202.26 points to fall though the psychologically important threshold on Friday.

The Topix index of all first section issues closed 37.99 points, or 2.04%, higher at 1,902.48, following a 61.74 -point plunge Friday.

After its dive the previous trading day, triggered by a spike in the U.S. 10-year interest rate Thursday, the Tokyo market opened higher, as the situation surrounding the U.S. interest rate surge showed signs of calming down late last week, brokers observed.

Although the Nikkei gained by over 700 points at one point in the morning, thanks to buybacks partly prompted by a rise in U.S. Dow futures in off-hours trading, the key market gauge turned top-heavy to fluctuate within a narrow range in positive territory in the afternoon, pressured by profit-taking.

The Tokyo market, throughout the day, was also supported by the popularity of high-tech issues following a rebound in the U.S. tech-heavy Nasdaq composite index Friday, as well as climbs in the Chinese markets, the brokers added.

“Despite its robust performance on Monday, the Tokyo market couldn’t completely recover from Friday’s plunge as investors were still wary of the moves of U.S. interest rates,” Maki Sawada, strategist at Nomura Securities Co., said.

Noting that the U.S. Dow Jones Industrial Average declined Friday for the second consecutive session, Sawada added that the Tokyo market players were also waiting to see how the U.S. market gauge will move this week.

Meanwhile, a strategist at an asset management firm suggested that a further fall of U.S. interest rates would be necessary in order for market participants to engage in active buying and for the Nikkei to cross the 30,000 threshold once again.

On the TSE first section, gainers overwhelmed losers 1,931 to 229 while 34 issues stayed unchanged. Volume decreased to 1.250 billion shares from Friday’s 1.688 billion shares.

Tokyo Electron, Advantest and other semiconductor-related issues attracted hefty buying, thanks to a rise in the U.S. SOX Philadelphia semiconductor index Friday.

Job information service provider Recruit Holdings advanced 3.75%, thanks to news reports that the company sold its registered headquarters building in Tokyo.

Among other major winners were air conditioner-maker Daikin and medical information provider M3.

On the other hand, travel-related issues, such as travel agency H.I.S. and railway operator JR West, succumbed to profit-taking in the wake of their rises last week.

Electronics maker Sharp and cybermall operator Rakuten also fell.

In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average climbed 330 points to end at 29,580.

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