March 18 (Reuters) - Japanese stocks advanced on Wednesday after Wall Street staged a strong rebound as policymakers across the world cobbled together packages to counter the severe restrictions on various regular activities aiming at slowing the spread of the coronavirus.
The overall sentiment, however, was still fragile as lockdowns in Europe and the United States fanned concerns about the widening epidemic and whether policy support would be adequate enough to contain the economic fallout.
The benchmark Nikkei average rose 1.7% to 17,308.33 by the midday break, moving off a 3-1/2-year low touched on Tuesday.
The Nikkei’s volatility index, a measure of investors’ volatility expectations based on option pricing and considered to be a fear gauge, dropped 0.6% to 56.32, but was still not far from Monday’s nine-year peak of 60.86.
Adding to the wariness were U.S. stock futures, which slid as much as 3.5% in Asian trade, a day after the S&P 500 climbed 6.0% and the Dow gained 5.2%.
Shares in Japan’s Fujifilm Holdings Corp jumped 14.7% after a Chinese official said the company’s Avigan anti-flu drug appeared to help coronavirus patients recover.
The broader Topix rose 2.7% to 1,302.39 by the midday recess, moving further away from a near four-year trough touched on Tuesday.
All but three of the 33 sector sub-indexes on the Tokyo Stock Exchange traded higher, with chemicals, sea transport and precision machinery being the top three performing sectors.
Hopes that the Bank of Japan will buy Exchanged Traded Funds (ETFs) more aggressively supported the market broadly, traders said.
The BOJ bought a record 120 billion yen ($1.12 billion) of Japanese stock ETFs on Tuesday, even though the broader market index rose in the morning. ($1 = 107.2800 yen) (Reporting by Tomo Uetake; Editing by Subhranshu Sahu)