TOKYO (Kyodo) -- Tokyo stocks rose Tuesday morning on optimism about upbeat earnings by Japanese firms and hopes for increased fiscal spending as the ruling bloc is expected to cooperate with opposition parties after losing its majority in the election.

The 225-issue Nikkei Stock Average rose 213.98 points, or 0.55 percent, from Monday to 38,819.51. The broader Topix index was up 21.54 points, or 0.81 percent, at 2,679.32.

The U.S. dollar weakened to the upper 152 yen range in Tokyo on selling after a surge the previous day, as the defeat of Japan's ruling coalition in Sunday's election sent the yen sharply lower.

At noon, the dollar fetched 152.99-153.00 yen compared with 153.24-34 yen in New York and 153.33-35 yen in Tokyo at 5 p.m. Monday.

The euro was quoted at $1.0812-0813 and 165.41-44 yen against $1.0806-0816 and 165.67-77 yen in New York and $1.0803-0804 and 165.65-69 yen in Tokyo late Monday afternoon.

On the stock market, the Nikkei index opened lower following a sharp rise on Monday but the downside was limited after Wall Street advances overnight.

Stocks later gained ground as solid earnings from some companies raised hopes for upcoming results, while hopes grew for an expansionary fiscal policy as the ruling Liberal Democratic Party faces the need to make deals with opposition parties to stay in power, analysts said.

Among opposition parties, the Democratic Party for the People, which sharply increased its seats in the powerful House of Representatives, has called for the government to hammer out large-scale stimulus measures.