TOKYO: Tokyo stocks surged on Wednesday as investors took heart from US rallies while awaiting a Bank of Japan policy decision this week.

The benchmark Nikkei 225 index advanced 2.67 percent, or 718.58 points, to 27,680.26, while the broader Topix index jumped 2.29 percent, or 43.65 points to 1,946.44.

“The Nikkei average enjoyed major gains as the market went risk-on,” Okasan Online Securities said.

Strong gains on Wall Street encouraged investors, who picked up blue-chip tech stocks, while rises in other Asian markets also encouraged buying, analysts said.

With a dearth of market-moving events, short-term investors helped lift the market, Daiwa Securities said, while brokers await a policy decision from the European Central Bank.

It is largely expected that the ECB will raise eurozone interest rates 0.25 percentage points, but some have argued that the bank should consider a half point hike.

“Speculation that the ECB may consider a rate hike by 50 basis points to correct the high dollar… contributed to improving the market’s sentiment,” Daiwa said.

The Bank of Japan will announce its policy decision on Thursday, though it is expected to keep its policy unchanged.

The dollar fetched 138.28 yen, against 138.21 yen in New York late Tuesday.

Japanese stocks post modest gains ahead of BOJ policy meet

In Tokyo, SoftBank Group surged 2.40 percent to 5,500 yen and Sony Group roared 4.14 percent to 11,940 yen.

Advantest, a major producer of testing kits for semiconductors, jumped 4.71 percent to 7,560 yen, while industrial robot maker Fanuc rose 2.94 percent to 22,095 yen.

Toyota added 0.78 percent to 2,194 yen, shipping firm Nippon Yusen rose 0.30 percent to 9,890 yen and Mitsubishi UFJ Financial Group gained 1.41 percent to 727.4 yen.