The Nikkei closes up 2pc but nerves persist
The Nikkei average climbed 2pc today on short-covering after three days of losses.
Market participants calling the move a short-term rebound amid fears about sovereign debt in Europe and a US economic meltdown.
And a regional rally helped Tokyo extend gains in the afternoon.
Analysts also said that after Tokyo's 5.2pc drop in the previous three days, stocks listed on the main board were trading at an attractive price-to-book ratio averaging 0.92.
But nerves persisted ahead of the Federal Reserve's Beige Book of US regional economic conditions to be released later today.
This report could provide fresh clues on the strength of the US economy.
The benchmark Nikkei rose 2 per cent to 8,763.41. The broader Topix index added 1.7 per cent to 753.63.
Volume was moderate with about 1.8 billion shares changing hands on the Tokyo stock exchange's main board, around last week's daily average.