TOKYO, March 24 (Xinhua) -- Tokyo stocks closed sharply higher Tuesday as investors snapped up stocks paying high dividends before the end of the business year, while the Bank of Japan's purchases of exchange-traded funds underpinned the market.
The 225-issue Nikkei Stock Average surged 1,204.57 points, or 7.13 percent, from Monday to close the day at 18,092.35.
The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, added 41.09 points, or 3.18 percent, to close at 1,333.10.
Trading got off to a bright start, local brokers said, as the yen's retreat against the U.S. dollar encouraged investors to leave safe havens and chase issues deemed undervalued recently.
"Shares were bought as investors' need to seek the safety of holding dollars in cash eased somewhat," Chihiro Ota, general manager of investment research at SMBC Nikko Securities Inc., was quoted as saying.
Market analysts added that buying sentiment was also propelled by investors wanting to snap up issues paying high dividends before the end of the business year.
They said that along with individual investors, retail and institutional investors sought out stocks with high paying dividend yields, with the latter looking to the payouts ahead of the end of the fiscal year to reinvest in stock futures.
The market was also underpinned by the Bank of Japan's recent purchases of exchange-traded funds as part of new easing measures rolled out recently, market analysts also noted.
Japan's central bank opted to double its purchasing of exchange-traded fund securities to 12 trillion yen (108.39 billion U.S. dollars) a year last week, in a move aimed at combating the downside economic effects of the COVID-19 pandemic.
The BOJ's purchases of ETFs through two straight trading days Monday totaled 200 billion yen (1.80 billion U.S. dollars).
"Hopes of buying by the BOJ helped boost investor sentiment," said Toshikazu Horiuchi, equity strategist at IwaiCosmo Securities Co.
The U.S. Federal Reserve's decision to increase its purchases of state-backed and other bonds to an unlimited amount, as just one of a raft of measures to cushion its economy from the impact of the coronavirus, was also cheered by the market, investment analysts said.
Issues paying large dividends found favor, with Nomura Holdings climbing 8.4 percent, Japan Airlines rising 3.9 percent, and Aeon closing the day 3.7 percent higher.
Nikkei heavyweight SoftBank Group added to recent gains, rocketing 19.0 percent, after announcing Monday it would sell assets to increase a hefty share buyback plan, as the firm aims to reduce debt and lift its share price.
By the close of play, mining, securities house and marine transportation-linked issues comprised those that gained the most, and issues that rose outpaced those that fell by 1,748 to 394 on the First Section, while 26 ended the day unchanged.
On the main section on Tuesday, 2.256 billion shares changed hands, dropping from Monday's volume of 2.697 billion shares.
The turnover on the second trading day of the week came to 3,619.1 billion yen (32.76 billion U.S. dollars).
