The Nikkei has bounced back from the six-week lows recorded by the index yesterday to post a rise of more than two per cent in today's (June 4th) trading.
It is the best day for the index for three weeks, with the 2.1 per cent increase in the value of shares leaving it at 13,533.76.
According to a report by Reuters, trading had been choppy and the Nikkei was down by 1.5 per cent at one point today, following on from the 3.7 per cent losses recorded yesterday.
A senior dealer at a foreign bank said: "On the institutional side, people are still very mixed. They were early sellers in the day. Throughout the day we picked up more buyers. Overall we are kind of flattish."
The Nikkei hit five-and-a-half year peaks during May, but has since lost around 15 per cent of its value to cancel out some of the progress it has made in 2013.
Stefan Worrall, director of equity cash sales at Credit Suisse in Tokyo, explained there is a chance of foreign investor's confidence in Japan outlook being affected by the Nikkei's recent poor performance.
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