Nikkei posts biggest gain since 2008 on Wall Street surge, US stimulus

Japan's benchmark Nikkei jumped 8% on Wednesday, its biggest daily gain since 2008, after Wall Street made an outsized rebound and US senators and Trump administration officials reached an agreement on a massive stimulus bill.

The Nikkei average closed at 19,546.63 points after its sharpest one-day advance since the peak of the global financial crisis in October 2008.

It has gained 18% in the last three sessions, driven by a confluence of positive factors.

On top of big US stimulus, buying by the Bank of Japan and likely also by the country's pension fund, triggered a wave of short-covering.

The news that the Tokyo Olympics will be postponed to next year rather than cancelled provided relief while SoftBank Group , heavyweight in the Nikkei, soared 55% in the last three sessions, on record share buy-back and asset sales plan.

Still, the benchmark is down about 19% from its January 17 peak, underscoring the unprecedented health crisis that has severely disrupted the world economy and the daily life of millions with many nations forced into lockdowns.

The Nikkei's volatility index, a measure of investors' volatility expectations based on option pricing and considered to be a fear gauge, rose to 48.28 from 45.49, although it was some way away from a nine-year peak of 60.86 hit last week.

On Wall Street, the Dow Jones Industrial Average soared 11.37% on Tuesday, its biggest one-day percentage gain since 1933.

The International Olympic Committee (IOC) and Japanese government agreed to put back the Games until 2021, a decision many investors have been looking for.

"Now that investors have one less uncertainty or risk factor to deal with, I would say the announcement has had a moderately positive impact on the stock market," said Masahiro Fukuda, an investment director at Fidelity International (FIL) Japan.

Dentsu Group Inc, Japan's main marketing agency for the Tokyo Games, surged 11.7% and sportswear maker Asics Corp jumped 17.5%.

The broader Topix gained 6.9%, the biggest gain in four years, to 1,424.62, with all of the 33 sector sub-indexes on the Tokyo Stock Exchange in positive territory.

Real estate was the top performing sector, up 11.3%, and the TSE REIT index climbed 11.6%, pulling away from a seven-year trough hit last Thursday.