TOKYO -- Just like that, large cap tech plays in Japan were all the rage again on Tuesday, thanks to the near 3.4% bounce in the

Nasdaq Composite

overnight. A mildly optimistic June economic report from the

Economic Planning Agency

also helped sentiment in Tokyo, which punched the yen higher against the greenback as well.

The

Nikkei 225

index rose 316.20 points, or 1.9%, to 16,907.55, while the

Topix

index, which includes all shares listed on the

Tokyo Stock Exchange's

first section, climbed 25.91, or 1.7%, to 1559.79. The

Jasdaq

small-cap index bounced 2.11, or 2.4% higher, to 88.97, while the Nikkei

over-the-counter

index rose 25.23, or 1.5%, to 1751.02.

With Sunday's parliamentary elections keeping many investors at bay, most of the buying in the tech sector was via local dealers and short-term day investors. Volume was modest at best, and will continue on the low side until next week, traders said.

Sony

(SNE) - Get Report

rose 100 yen, or 1.0%, to 9800 ($92.80),

Nippon Telegraph & Telephone

(NTT)

climbed 40,000, or 2.9%, to 1.4 million, while

NEC

(NIPNY)

gained 90, or 2.9%, to 3190.

Hitachi

(HIT)

rose 20, or 1.5%, to 1390 after the

Nihon Keizai Shimbun

reported the firm agreed to form a broad mainframe computer alliance with

IBM

.

Despite a calm debut yesterday for the eight shares listed on

Nasdaq Japan

, the sister bourse to America's Nasdaq, low liquidity and limited investor participation rocked many of the stocks today. Among the worst performers were

X Net

, down 250,000, or 4.4%, to 5.5 million, while

Digicube

lost 200,000, or 7.1%, to 2.6 million.

The dollar lost ground against the yen and fell to around 105.60 after the EPA said Japan's economy was one step closer to a self-sustaining recovery.

Hong Kong's

Hang Seng

index lost 180.73 points, or 1.1%, to 16,086.74 as bank and property shares got hit by profit taking.

Hang Seng Bank

(HSNGY)

shed HK$2.25, or 3.0%, to 72.50 ($9.30) while

Sun Hung Kai Properties

(SUHJY)

fell 2.25, or 3.8%, to 56.75.

Hutchison Whampoa

(HUWHY)

fell 1.75, or 1.7%, to 99.25 despite news that the firm would gain HK$6.5 billion of exceptional profit from the merger of its Canadian unit

Husky Oil

with Canada's

Renaissance Energy

.

Korea's

Kospi

index jumped 29.94 points, or nearly 4.0%, to 785.32 after bank shares rallied during the last hour of trading. The government said it would inject funds into the money market and prop up ailing institutions.

Kookmin Bank

(KKBKY)

jumped 1400 won, or 11.1%, to 14,000 ($12.48), while

Cho Hung Bank

(CHOHF)

rose 355, or 15.0%, to 2725.