TOKYO, April 19 (Xinhua) -- Tokyo stocks closed higher Tuesday, although gains were capped by ongoing concerns over the Japanese yen's volatility and a potentially widening monetary policy gap between Japan and the U.S., as well as jitters over earnings.

The 225-issue Nikkei Stock Average added 185.38 points, or 0.69 percent, from Monday to close the day at 26,985.09.

The broader Topix index, meanwhile, gained 15.62 points, or 0.83 percent, to finish at 1,895.70.

Local brokers said that high tech issues bounced back after losing ground recently, as their U.S. peers finished higher overnight.

They pointed out however that the yen's rapid plunge versus the U.S. dollar sparked concerns over inflation and the prospect of a widening policy gulf between the U.S. Federal Reserve and the Bank of Japan (BOJ).

The Japanese yen plunged to hit a new fresh 20-year low against the U.S. dollar, dropping past the 128 level as monetary policy concerns continue following another rise in U.S. Treasury yields.

The dollar's appreciation against the yen in the morning accelerated to its highest level since May 2002 in the afternoon, triggered by the 10-year U.S. Treasury bond climbing overnight to its highest level since December 2018.

Market strategists here said that investors pilled into the U.S. dollar following comments made by Federal Reserve Bank of St. Louis President James Bullard the previous day, suggesting that the end of the year interest rates of 3.5 percent to combat deflation would be desirable.

"His hawkish remarks further cemented views that the U.S. central bank may become more aggressive in its fight against inflation," Yuji Saito, head of the foreign exchange department at Credit Agricole Corporate & Investment Bank in Tokyo, was quoted as saying.

Bank of Japan (BOJ) Governor Haruhiko Kuroda, meanwhile, said on Monday that recent sharp declines in the Japanese yen could negatively impact Japanese firms' earnings outlooks and the nation's already struggling economy.

"The yen's recent depreciation against the U.S. dollar has been quite rapid," Kuroda told a parliamentary session.

The BOJ chief said that it is more desirable that currencies move stably reflecting economic fundamentals, with his assessment of recent volatility in the currency markets coming amid growing concerns over the impact this could have on Japan's fragile economy.

The sudden depreciation of the Japanese currency also caused Japan's Finance Minister Shunichi Suzuki to say Tuesday that the yen's rapid fluctuations are "undesirable."

Typically, Japanese mainstay exporter firms cheer a weaker yen as it enhances price competitiveness in overseas markets and can see profits augmented when repatriated on favorable exchange rates.

However, a recent surge in energy and commodity prices that resource-poor Japan has to import is hurting companies' balance sheets due to the yen's weakness, which is weighing on consumer spending, market analysts here said.

"Amid all that, investors are disposed to take a wait-and-see attitude. Volatile trading continues, giving little sense of an overall market direction," Jun Kitazawa, a strategist at Miki Securities, was quoted as saying.

Dealers here also said that gains were trimmed as some investors lacked confidence in upcoming earnings figures from firms here hit by the downside effects of rising energy and commodity prices.

"Some investors are not optimistic about the upcoming earnings season in Japan, as elevated energy and commodity prices may limit revenue growth," Shingo Ide, chief equity strategist at the NLI Research Institute, was quoted as saying.

By the close of play, marine transportation, mining and transportation equipment issues, comprised those that gained the most, and issues that rose outpaced those that dropped by 1,253 to 505 on the Prime Market, while 81 ended the day unchanged.

The yen's drop, gave some exporters a boost, however, with automakers accelerating.

Nissan Motor gained 3.9 percent, Mazda Motor jumped 4.9 percent, while Subaru closed 2.1 percent higher.

High tech issues including chip-oriented issues were given a boost by their U.S. peers gaining ground overnight, with Tokyo Electron rising 2.3 percent, while Advantest ended the day 3 percent higher.

The market was dragged down, however by heavyweights Fast Retailing, operator of the Uniqlo clothing chain of casual clothing stores, and tech startup investor SoftBank Group falling 1.7 percent and 1.9 percent, respectively.

On the Prime Market on Tuesday, 961.96 million shares changed hands, rising from Monday's volume of 834.81 million shares.

The turnover on the second trading day of the week came to 2.233,63 billion yen (17.39 billion U.S. dollars). Enditem

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