TOKYO, Jan. 17 (Xinhua) -- Japan's benchmark Nikkei stock index bounced back Tuesday as a halt in the yen's rise against the U.S. dollar prompted investors to buyback oversold issues amid a cautious mood ahead of the conclusion of the Bank of Japan's policy meeting.
The 225-issue Nikkei Stock Average added 316.36 points, or 1.23 percent, from Monday to close the day at 26,138.68.
The broader Topix index, meanwhile, gained 16.58 points, or 0.88 percent, to finish at 1,902.89.
Brokers here said that exporters found favor as the yen's rise to a seven-month high a day earlier versus the U.S. dollar eased, with the Japanese currency falling back to the 129 yen-range versus the greenback.
The pause in the yen's climb against the U.S. dollar came, they added, as investors adjusted positions while the Bank of Japan's board convenes for its monthly policy-setting meeting, with economists divided as to the outcome, following its surprise policy tweak last month.
"The market is completely divided over the outcome of the BOJ's policy meeting. Some say that nothing will happen while others say a further policy tweak is possible including widening the allowable bond yield range further or even abandoning its yield curve control policy," Hirokazu Kabeya, chief global strategist at Daiwa Securities Co., was quoted as saying.
"That divide took some of the rising momentum off stocks in the afternoon as a wait-and-see mood prevailed," Kabeya said.
Among issues with a broad exposure to overseas markets finding favor on the yen's retreat versus the U.S. dollar, Toyota accelerated 2.5 percent, while Nissan advanced 2.7 percent.
Other automakers gaining included Suzuki Motor rising 2.3 percent and Mazda Motor climbing 3.9 percent.
Technology-oriented issues were also sought out with heavyweight chip-making equipment manufacturer Tokyo Electron and industrial robotics maker Yaskawa Electric jumping 2 percent and 4 percent, respectively.
Sony also closed in positive territory, while Uniqlo clothing store operator Fast Retailing helped buoy the broader market, leaping 2.8 percent by the close.
But banking shares bucked the upward trend on concerns over the BOJ's possible departure from its dovish monetary policy stance, with Sumitomo Mitsui Financial Group slipping 0.8 percent.
The turnover on the second trading day of the week came to 2,462.21 billion yen (19.12 billion U.S. dollars). ■