The Tokyo Stock Exchange's benchmark index gained more than 2 percent on Thursday after the US Federal Reserve decided to cut interest rates for the first time in four-and-a-half years.

The Nikkei 225 ended the day at 37,155, up 2.13 percent from Wednesday's close. It gained over 1,000 points, or nearly 3 percent at one stage. The index regained the 37,000 level for the first time in about two weeks.

Investors welcomed the Fed's decision on Wednesday to adjust policy to support US economic growth as providing a tailwind for Japanese firms.

The yen strengthened to the mid-140 to-the-dollar level after the Fed's announcement, but weakened to the 143-yen level in Tokyo trading on Thursday.

Comments from Fed Chair Jerome Powell eased concerns that rate cuts would continue at the same pace.

Wednesday's half-a-percentage point rate cut is the first easing since the early days of the coronavirus pandemic.
The policy change signaled a shift from fighting inflation to supporting employment.

The focus of investors has now switched to the Bank of Japan, which is due to announce its policy decision on Friday at the end of a two-day meeting.