Japan's Nikkei share average scored its biggest single-day gain in nearly seven years today.
The big gains came after Prime Minister Shinzo Abe's comments sparked hopes of more policy steps to support the economy and long-term investors emerged to pick up bargains.
The Nikkei jumped 7.7% to close at 18,770.51 for its biggest single-day gain since October 30, 2008, led by gains in drugmakers and financial shares.
Abe, who just won a mandate to lead the ruling Liberal Democratic Party for another three years, gave a statement indicating that he would seek to lower corporate tax and sounded optimistic on reaching a trans-Pacific trade deal.
Analysts said Abe's comments gave an added boost to Japanese stocks as they rebounded from overselling yesterday, helped by overnight gains on Wall Street. A steadily weakening yen also helped boost Japanese shares.
The prime minister's fiscal policy has yet to translate into gains in real wages for Japanese workers, and market participants said easing the corporate tax burden is a step toward giving companies more profits to put into employees' pockets.
Long-term investors also saw the Nikkei's dip to a seven-month low yesterday as a good opportunity for bargain-hunting as the Nikkei was trading around 14 times forecast earnings.
The country's public pension funds, which have been stepping up stock investment under Abe, are likely to be among them.
Tokyo's broader Topix index also gained 6.4%, with turnover hitting 3.14 trillion yen, more than 15% above the average in the past 100 days.