Japan's Nikkei stock average jumped 3.2 percent on Monday, reassured by gains in U.S.

RELATED ARTICLES Nikkei falls from 3-month high Nikkei falls from 3-month high Nikkei vaults 9,000 for first time in 3 months Nikkei closes at 3-month high on US jobs data Nikkei slips before US jobs data, Sony surges

shares after investors took the Federal Reserve's discount rate hike as a sign that the financial system is healing.

The surprise hike in discount rate had pushed Tokyo shares lower on Friday on concerns that overseas markets would interpret the move as harbinger of faster-than-expected rate hikes.

Sony Corp and other exporters rose as the dollar edged higher against the yen, extending gains made last week after the Fed's move. Trading house Mitsui & Co and other resource shares climbed on a rebound in commodities prices that had fallen sharply on the discount rate hike.

"Investors on Friday were worried about the impact of the U.S. discount rate hike on Wall Street, but U.S. markets in the end were quite settled," said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Securities.

"Now the issue becomes when they raise the fed funds rate, and opinions are divided on this. For today, Japanese shares are up on short-covering."

In thin trade, the benchmark Nikkei rose 320.01 points to 10,443.59, while the broader Topix rose 2.8 percent to 914.05. The Nikkei lost 2.1 percent on Friday.

The Fed said late on Thursday that it would raise the interest rate it charges banks for emergency loans to 0.75 percent from 0.5 percent, taking a step towards normalising emergency policy used to fight the worst financial crisis since the Great Depression.

But the U.S. central bank also said the move did not signal any change in the outlook for the economy or for monetary policy, and left its benchmark interest rate unchanged near zero.

The Shanghai stock market was down 0.3 percent after returning from a week-long holiday for the Lunar New Year.

Investors were eager to see how shares responded to China's surprise hike of bank reserve requirements on Feb. 12, though some market players said the action was factored in.

Recall-hit Toyota Motor Corp rose 2.9 percent to 3,395 yen on short-covering and despite a July 2009 company document that showed it was aware of sudden acceleration complaints.

The document, obtained by Reuters, seems sure to add to the debate about whether Toyota missed or ignored red flags about a rising number of complaints.

"What we're seeing today is basically just Toyota erasing Friday's losses, rebounding to where it was on Thursday," said Mitsubishi UFJ's Yamagishi. Toyota's high on Thursday was 3,420 yen and it closed at 3,360 yen.

Among exporters, Canon Inc climbed 3.8 percent to 3,845 yen and Sony Corp advanced 3.7 percent to 3,210 yen. Kyocera Corp added 3.4 percent to 8,320 yen.