Mitsubishi UFJ Financial Group Inc., the nation's biggest publicly traded bank, climbed 2.7 percent. The Topix index tumbled 11 percent in the month to January 7. Japan was the worst performing market among the world's 10 largest in 2007, making shares cheaper than U.S. counterparts.
The market opened sharply lower, tracking losses on Wall Street overnight that were due to lingering worries about the US housing market.
But after falling 257 points, the Nikkei rebounded as domestic and foreign investors bought back major issues, with many technical data showing valuations were already cheap.