Stocks bounced back sharply Wednesday thanks to massive buybacks after the previous day’s tumble.

The Nikkei 225 average climbed 342.89 points, or 1.98 percent, to close at 17,678.74. On Tuesday, the key market gauge plunged 222.19 points.

The Topix rose 24.61 points, or 1.77 percent, to end at 1,417.00 after tumbling 16.36 points Tuesday.

Buying outpaced selling from the outset of Wednesday’s trading after the Dow Jones industrial average rose sharply reflecting easing concerns over Greek debt problems and higher crude oil prices.

The Nikkei briefly jumped more than 400 points as export-oriented names enjoyed handsome gains amid the yen’s drop against the dollar.

Stocks held firm also on the back of solid performances of Asian markets, but their upside was capped by some selling on a rally and profit-taking, brokers said.

A jump in stock index futures drove up cash stocks, brokers said. Overseas investment funds resumed purchases amid easing risk-averse sentiment, an official at an online brokerage firm said.

The bond market regaining composure after the previous day’s turmoil also shored up stocks, brokers said.

Still, “the Nikkei average’s upside was capped at around 17,800,” said Hiroaki Hiwada, senior strategist at the investment research division of Toyo Securities Co.

Fresh incentives, such as favorable readings in Automatic Data Processing Inc.’s employment report and the U.S. Institute for Supply Management’s report on its nonmanufacturing business index, both for January and due out later Wednesday, will be necessary for the Nikkei to test its upside, Hiwada added.

Rising issues outnumbered falling ones 1,542 to 250 on the first section, while 70 issues were unchanged.

Volume decreased slightly to 2.727 billion shares from 2.758 billion Tuesday.

Electronics giant Fujitsu shot up 3.96 percent after Daiwa Securities raised its stock price target, brokers said.

The yen’s drop brightened other electronics giants, such as Sony and Hitachi, as well as automakers Toyota, Mazda and Honda.

On the other hand, Fuji Heavy Industries fell sharply as its group operating profit forecast for the current business year to March fell short of market expectations.

Other losers included Oriental Land, which operates Tokyo Disney Resort, electronics giant Panasonic and mobile carrier KDDI.

In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average climbed 330 points to end at 17,660.