Tokyo shares ended sharply higher on Tuesday after the previous day's sell-off, with dealers hopeful Donald Trump can push through his tax and spending agenda despite last week's healthcare bill collapse. A drop in the yen against the dollar from the previous day also helped support exporters, although comments from a top Federal Reserve official continue to weigh on the US unit.
Global markets were sent skidding Monday after Trump's repeal of Obamacare fell at the first hurdle, fuelling fears he will struggle to push through promised economy-boosting measures.
However, Asian investors took heart in a relatively positive lead from Wall Street, where shares pared early plunges to end only slightly lower.
The benchmark Nikkei 225 index closed up 1.14 percent, or 217.28 points, at 19,202.87. The Topix index of all first-section issues rose 1.34 percent, or 20.44 points, to 1,544.83.
"What seems to be going on in US stocks is that President Trump is being given the benefit of the doubt that he will be able to deliver on tax and infrastructure," said Greg McKenna, chief market strategist at AxiTrader.
The dollar, which has tumbled against its major peers since the start of the year, also saw a pick-up towards the end of Monday US trade. While the greenback was at 110.66 yen in Tokyo, stable compared with 110.65 yen late in New York, it was above the levels seen in Asia on Monday.
"The yen's trade in the upper half of the 110 range lifted sentiment," sparking buy-backs after the previous day's sharp falls, Okasan Online Securities chief strategist Yoshihiro Ito said in a commentary.
And Toshihiko Matsuno, a senior strategist at SMBC Friend Securities, told Bloomberg News: "The fall in equities in the US - the epicentre of this all - wasn't steep, while the dollar's decline also faltered," allowing investors to think there is no need to be so pessimistic about Trump.
"If the yen stays around the 110 to-the-dollar range, Japanese companies could still manage double-digit profit growth in the new fiscal year," he said.
A weaker yen helps boost the profitability of exporters and spurs demand for their shares.
Panasonic climbed 3.05 percent to 1,232 yen, while Canon rose 0.89 percent to 3,492 yen. Toyota was up 0.97 percent at 6,218 yen.
Toshiba gave up early gains to fall 0.54 percent to 217.2, having lost more than two percent Monday on news reports that its loss-hit US unit Westinghouse could decide to file for Chapter 11 bankruptcy as early as Tuesday in a court-protected restructuring.
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