The Tokyo Stock Exchange's key Nikkei-225 index gained 353.66 points to 17,279.06. The Topix measurement of all first-section issues rose 27.36 to 1,574.34. Trading was heavy with volume estimated at 666 million shares compared with 477.8 million shares on Monday. Medical-related companies did well after the ground-breaking announcement Monday by scientists around the world that they had roughly mapped out the human genetic code.

"Pharmaceutical and bio-chemical issues were boosted on the announcement of the human genome project," Nishi said. Among pharmaceutical firms, Dainippon Pharmaceutical Co. Ltd. rose 43 yen, or 3.2 per cent, to 1,395 while Takeda Chemical Industries Ltd. gained 170 yen to 6,980 yen.

Investors also bought stocks on expectations that the US central bank's Federal Open Market Committee (FOMC) will sit tight on interest rates at its two-day meeting starting Tuesday. "Market sentiment recovered as chances are high that the FOMC will pause this time," said Sakura Friend Securities broker Koichi Kawata. "The market will target 17,500 points this week," Kawata predicted.

European shares slip London
European share prices fell slightly early on Tuesday amid thin trading volumes before a decision on interest rates by the US Federal Reserve bank on Wednesday. In London, the FTSE 100 index of leading shares was showing a loss of 12.4 points at 6,392.8 points. In Paris, the CAC 40 index was showing a loss of 1.06 per cent, or 70.13 points, mid-morning at 6,516.13 points. In Frankfurt, meanwhile, the DAX index opened with a gain of 0.03 per cent to 7,029.55 points.

Dealers said that trading volumes were extremely light as the Fed prepared to meet for its regular monetary policy meeting. Although most economists predicted no change in US lending rates, brokers were content to sit on the sidelines until after the decision was announced on Wednesday. As such, European markets were more muted than the other international markets.