/www.fxserver.com/ TOKYO (AP) -- After nearly two weeks of declines, Tokyo stocks rebounded Tuesday morning, on media reports of a government plan to bolster banks and following strong gains in U.S. stocks. The dollar rose against the yen.
The benchmark 225-issue Nikkei Stock Average was up 116.47 points, or 1.38 percent, to 8,567.41 points at midday. On Monday, the Nikkei shed 65.13 points, or 0.76 percent, to 8,450.94 points.
The dollar bought 121.38 yen at 11 a.m. Tuesday, up 0.78 yen from late Monday, and slightly above its level of 121.35 yen in New York Monday.
The Nikkei surged on the back of rising bank shares after the financial daily, Nihon Keizai, reported Tuesday that the government is considering not forcing banks to reduce equity once they write off bad loans. UFJ, Mizuho, and Mitsubishi Tokyo Financial Group were all higher early Tuesday.
The dollar's rise against the yen also prompted some investors to buy high-tech issues Hitachi, Toshiba, Nintendo, Kyocera and NTT DoCoMo, traders said.
A weaker yen usually helps Japanese export-dependent companies by making their products cheaper and more competitive in other markets. It also boosts the value of their earnings when overseas revenues are converted back to yen.
Tuesday's rise was the first in 10 sessions.
In New York, bargain hunters snatched up stocks discounted by two weeks of declines on Monday.
The Dow closed up 193.69, or 2.3 percent, at 8,627.40. The broader Nasdaq composite index rose 37.91, or 2.8 percent, to 1,400.33.
The broader Tokyo Stock Price Index rose 8.61 points, or 1.04 percent, to 836.43 points. The TOPIX, which includes all issues on the exchange's first section, declined 7.95 points, or 0.95 percent, to end at 827.82 points on Monday.
In currencies, the dollar appears to have hit bottom following its sharp downturn against the yen and euro last Friday in New York trading.
The euro bought 124.31 yen Tuesday morning, up from 123.43 yen late Monday. Against the dollar, the euro was at $1.0237, up from $1.0236 late Monday.
The benchmark 10-year government bond was quoted at 0.9600 percent Tuesday morning, down from 0.9650 percent late Monday. Its price was up 0.05 at 100.36.