Tokyo stocks rebounded sharply Tuesday, with buying sentiment swelling in the wake of the previous day’s sell-off.

The 225-issue Nikkei average of the Tokyo Stock Exchange jumped 582.01 points, or 2.09%, to finish at 28,406.84, after plunging 259.64 points Monday.

The Topix index of all TSE first section issues ended up 28.88 points, or 1.54%, at 1,907.74, in a turnaround from a 4.56-point drop the previous day.

Stocks spurted from the outset attracting active buybacks. The market dive the previous day also spurred purchasing by investors adopting the “buying-the-dip” strategy.

The Taiwanese market’s powerful rally and a rise in U.S. index futures in off-hours trading helped Tokyo stocks go further up in the morning.

A larger-than-expected decline in Japan’s gross domestic product in January-March, announced before the market opening, little affected transactions, brokers said.

In the afternoon, the market lost steam due to a lack of fresh events but remained broadly higher.

The day’s rebound was led by “bear” investment trusts’ purchase of Nikkei futures, on top of buybacks of high-priced cash stocks, an official at a bank-affiliated brokerage house said.

“Although the Nikkei shot up, there were no signs of active buying by large-lot investors,” another brokerage firm official noted.

Kazuo Kamitani, strategist at Nomura Securities Co., pointed out that investors are still wary of inflation risks in the United States despite Federal Reserve Vice Chairman Richard Clarida’s latest comments ruling out the possibility of the Fed starting tapering quantitative easing early.

Players retreated to the sidelines in the afternoon to wait for a speech later on Tuesday by Dallas Fed chief Robert Kaplan, who has recently made a hawkish remark, Kamitani added.

On the TSE first section, gainers overwhelmed decliners 1,817 to 322 while 53 issues were unchanged. Volume grew to 1.231 billion shares from Monday’s 1.164 billion shares.

Toyota advanced 1.98% to notch an all-time high.

Job information service provider Recruit Holdings and megabank group Mitsubishi UFJ jumped after separately posting rosy earnings forecasts for the year ending next March.

Other noticeable winners included steelmakers and technology firms.

Meanwhile, Nisshin Seifun dived 4.01% due to a profit warning the flour-maker issued for the same year.

Power and gas utilities also met with selling.

In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average soared 690 points to end at 28,460.

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