TOKYO: Japanese shares ended higher on Monday, recovering from sharp losses seen in the previous session, as concerns about Prime Minister Shinzo Abe's resignation were tempered by speculation that his possible successor could continue his current policies.

The benchmark Nikkei share average rose 1.12% to 23,139.76 and added 6.59% for the month - its biggest since May.

The Nikkei dropped as much as 2.65% on Friday before closing 1.41% lower, as Abe's abrupt resignation for health reasons stirred worries about future fiscal and monetary stimulus policies.

But local media reports that Chief Cabinet Secretary Yoshihide Suga would join the race to succeed Abe calmed nerves. A Suga government could extend the fiscal and monetary stimulus that defined the Abe regime.

The ruling Liberal Democratic Party will vote on Sept. 14 to select a new leader to succeed Abe, Jiji news agency reported.

"Today's rally is just temporary," said Hideyuki Ishiguro, a senior strategist at Daiwa Securities. "Future corporate performance will be crucial as the new administration is elected."

The broader Topix gained 0.83% to 1,618.18.

Leading sectoral gains on the main bourse, the wholesales index jumped 4.52% as Warren Buffett's Berkshire Hathaway acquired more than 5% stakes in five Japanese trading firms.

Marubeni jumped more than 9.48%, Sumitomo Corp climbed 9.09%, Mitsubishi Corp rose 7.72%, Mitsui & Co added 7.35% and Itochu Corp gained 4.19%.