TOKYO, Oct. 18 (Xinhua) -- Japan's benchmark Nikkei stock index closed higher Tuesday, lifted by Wall Street's overnight gains, although the yen's drop to a fresh 32-year low versus the U.S. dollar triggered concerns over a possible "stealth" intervention by Japanese financial authorities.

The 225-issue Nikkei Stock Average gained 380.35 points, or 1.42 percent, from Monday to close the day at 27,156.14.

The broader Topix index, meanwhile, rose 21.88 points, or 1.16 percent, to finish at 1,901.44.

Local brokers said that trading took its cues primarily from U.S. stocks advancing overnight, including the tech-heavy Nasdaq, with U.S. futures markets rising adding to an upbeat mood.

"There is the fact that U.S. stocks were up yesterday, but futures have also risen sharply, for example the Dow Jones," Yutaka Miura, a senior equities analyst at Mizuho Securities, was quoted as saying.

"I think the buying has been driven in anticipation of stocks rising on Wall Street this evening," added Miura.

Market analysts said traders here were mainly taking their cues from Wall Street, particularly ahead of corporate earnings reports due out soon, adding that the yen's persistent weakness had little bearing on the market Tuesday, however, this could drastically change.

In early trade, the Japanese currency dropped to a fresh 32-year low in the 149 zone versus the U.S. dollar, leading to Japanese Finance Minister Shunichi Suzuki warning that should volatility in the foreign exchange market continue, then "appropriate" steps would be taken.

"There is no change in our stance that we will take an appropriate response," Suzuki told reporters, hinting at another market operation to redress the yen's weakness, adding that excessive volatility caused by speculative moves is unacceptable.

Japanese financial authorities intervened in the currency markets to support the yen on Sept. 22 for the first time since 1998, to counter one-sided, rapid yen moves, as described by financial authorities here.

On Tuesday, market analysts speculated that Japan may have conducted a "stealth" intervention as the yen gained ground after Suzuki's warning, although Suzuki would neither confirm nor deny such measures had been taken.

"Generally speaking, there is a time when we say in public intervention was conducted, while at another time we don't," the finance minister said.

The yen's persistent weakness against the U.S. dollar, a result of a widening interest rate gap between the U.S. Federal Reserve and its aggressive monetary tightening policy and the Bank of Japan's commitment to its ultra-easy policy, is proving a headache for the government, strategists here said.

While a weak yen is usually a boon for Japan's export-led economy, as overseas profits grow when repatriated and Japanese firms' price competitiveness is enhanced in global markets, import costs for already inflated energy and material goods are skyrocketing and hurting companies and households here, they added.

Japanese Prime Minister Fumio Kishida said in parliament on Tuesday that the yen's rapid depreciation is "problematic" and the government will work with the Bank of Japan (BOJ) in taking appropriate steps.

By the close of play, precision instrument, pharmaceutical, and service-oriented issues comprised those that gained the most on the Prime Market.

M3 Inc., an online healthcare services provider, was the Nikkei's best performer, jumping 5.6 percent, followed by Recruit Holdings Co., Ltd. leaping more than 5 percent after announcing a hefty share buyback program.

Technology issues followed their U.S. peers higher, with Tokyo Electron rising 1.4 percent, Screen Holdings adding 1.0 percent, while Fanuc closed 2.1 percent higher.

Others finding favor included Nidec Corp. climbing 3.3 percent and Sharp Corp. jumping 5 percent.

Issues that rose outpaced those that fell by 1,587 to 208, while 42 ended the day unchanged.

On the Prime Market on Tuesday, 1,106.72 million shares changed hands, rising from Monday's volume of 1,057.21 million shares.

The turnover on the second trading day of the week came to 2,748.62 billion yen (18.44 billion U.S. dollars). Enditem

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