TOKYO, July 8 (Xinhua) -- Tokyo stocks reversed losses Wednesday with the key benchmark Nikkei surging almost 3 percent on Thursday as Wall Street's overnight rally coupled with a weaker yen lifted investor mood and doused fears about the global economic recovery, ahead of the highly anticipated U.S. earnings season.
The 225-issue Nikkei Stock Average climbed 256.09 points, or 2. 76 percent, from Wednesday to 9,535.74, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange advanced 19.51 points, or 2.32 percent, to 861.02.
Brokers said investors' appetite for riskier assets such as shares returned Thursday following U.S. financial firm State Street Corp. announcing a better-than-expected earnings outlook for the second quarter, sending Wall Street higher overnight.
"The markets had been falling for a long time, so people who had been short on stocks now have a reason to buy," said on local strategist, who added, "Positive data surprises show the global economy is on track to recovery.. We will likely see good numbers come out in the upcoming earnings season."
Japanese financial issues advanced after the bullish forecast from State Street Corp. with Mitsubishi UFJ Financial Group Inc. gaining 3.4 percent to 428 yen and Sumitomo Mitsui Financial Group Inc. climbing 3 percent to 2,679 yen.
Resona Holdings Inc., meanwhile, gained 2.8 percent to 1,091 yen.
In twine with high expectations for positive news from the U.S., analysts also noted that European banking regulators' planned stress tests to asses the fiscal health of countries in the debt- plagued euro zone, boosted investor optimism.
Contributing to Thursday's positive news was the yen's depreciation against the U.S. dollar and the euro, making Japanese export-related issues an attractive proposition.
The yen hit lows of 88.46 against the U.S. dollar and depreciated to 112.01 during trading hours on Thursday. A weaker yen ensures profits made by Japanese firms overseas are not eroded when repatriated.
Among Japanese automakers, Daihatsu Motor Co. jumped 4.8 percent to 948 yen, following the automaker's stock rating being raised to "outperform" from "market perform" by Mitsubishi UFJ Morgan Stanley Securities Co.
Honda Motor Co. climbed 3.7 percent to 2,616 yen as the firm announced plans to sell 2,500 units of its Freed Spike minivan a month in Japan.
Mitsubishi Electric Corp. advanced 4 percent to 747 yen, following the company's robust intentions to double this fiscal year's planned capital spending on power semiconductors to 10 billion yen (113.16 million U.S. dollars), according to a newspaper report.
Meanwhile Sony Corp. gained 4.4 percent to 2,423 yen and Canon Inc. increased 3.3 percent to 3,445 yen.
Chip-related issues particularly were among the day's notable gainers, with Tokyo Electron Ltd. surging 5.2 percent to 4,900 yen, following news the company plans to boost production output at one of its plants in northern Japan by 20 percent.
Counterpart Advantest Corp., the world's largest maker of chip- testing equipment, leapt 6 percent to 1,881 yen and Sumco Corp., a silicon wafer maker for semiconductors, jumped 5.2 percent to 1, 586 yen, following the Nikkei newspaper reporting that semiconductor demand in Asia is increasing, accounting for more than 50 percent of total global sales.
On Thursday some 1.64 billion shares changed hands on the Tokyo exchange's First section, down from Wednesday's volume of 1.66 billion, with advancing issues outnumbering declining ones by 1, 425 to 164.
