Tokyo: The Nikkei average climbed almost 2 per cent on Thursday, moving away from a fresh 2.5 year closing low as investors bought back shares after France and Germany said Greece's place remains in the euro zone.
Tech shares also rose and Elpida Memory soared after it said may shift some of its domestic production to Taiwan and will start making new-generation chips to survive a stronger yen and a weak memory chip market.
Valuations for Tokyo shares remain attractive, with about two-thirds of shares traded on the Tokyo stock exchange's main board trading below their book value. However, this hasn't tempted foreign institutions into much fresh buying, traders said.
"Some investors are buying back the shares they sold in recent weeks on fears about Europe's debt problems and the US economy," said Tomomi Yamashita, fund manager at Shinkin Asset Management Co.
The Nikkei gained 1.9 per cent at 8,680.39, regaining the ground it lost a day earlier when it fell 1.1 per cent to 8,518.57, its lowest finish since April 2009.
The broader Topix index added 1.6 per cent to 753.58. Elpida jumped 6.5 per cent to 572 yen.
Among other tech shares, chipmaking equipment manufacturer Tokyo Electron Ltd climbed 3.9 per cent at 3,755 yen, and rival Advantest Corp added 3.1 per cent to 889 yen.
ANA fell 0.8 per cent on Thursday to 253 yen after Morgan Stanley Mitsubishi UFJ Securities cut its rating to "equal-weight" from "overweight", citing a slow recovery due to intensifying competition with such airlines as low-cost carriers. The brokerage cut its target price to 260 yen from 370 yen.
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