Tokyo, Aug 14 (IANS): Tokyo stocks closed higher on Wednesday as confidence was bolstered by gains of stocks in the US market overnight.

Japan's benchmark Nikkei stock index, the 225-issue Nikkei Stock Average, ended up 209.92 points, or 0.58 per cent, from Tuesday to close the day at 36,442.43, Xinhua news agency reported.

The broader Topix index, meanwhile, finished 28.35 points, or 1.11 per cent, higher at 2,581.90.

Market watchers here noted that the Tokyo market saw strong buying across various sectors including automotive and insurance, and improved market sentiment over the latest US inflation data spilled over into Tokyo, where semiconductor-related stocks such as Advantest, as well as automotive giants like Toyota and Honda, saw significant gains.

Volatility was also witnessed here in Tokyo as Prime Minister Fumio Kishida announced that he would not run in the upcoming LDP leadership election, which means the nation would see a new premier in September.

Some investors briefly bought into the market, hoping for positive changes with a new leadership, but the rally did not last.

Local analysts noted that market participants are likely to remain highly sensitive to further developments regarding the next potential prime minister, whose economic policies could vary widely.

On the top-tier Prime Market, advancing issues outnumbered declining ones by 1,223 to 369, with 54 issues remaining unchanged.