TOKYO (Kyodo) -- Tokyo stocks advanced Monday, with the Nikkei index briefly rising 2 percent, supported by a record high on the U.S. Dow Jones index and bargain-hunting after last week's declines in the Japanese market.

The 225-issue Nikkei Stock Average ended up 496.29 points, or 1.30 percent, from Friday at 38,780.14. The broader Topix index finished 19.07 points, or 0.71 percent, higher at 2,715.60.

On the top-tier Prime Market, gainers were led by service, insurance and precision instrument issues.

The U.S. dollar briefly fell to the upper 153 yen range in Tokyo after U.S. President-elect Donald Trump's nomination of hedge fund manager Scott Bessent as treasury secretary sent U.S. long-term interest rates lower as he is believed to pursue fiscal discipline, dealers said.

At 5 p.m., the dollar fetched 154.53-55 yen compared with 154.75-85 yen in New York and 154.72-74 yen in Tokyo at 5 p.m. Friday.

The euro was quoted at $1.0450-0451 and 161.49-53 yen against $1.0418-0428 and 161.23-33 yen in New York and $1.0486-0487 and 162.25-29 yen in Tokyo late Friday afternoon.

The yield on the benchmark 10-year Japanese government bond fell 0.010 percentage point from Friday's close to 1.070 percent, tracking a decline in long-term U.S. Treasury yields.

On the stock market, the Nikkei index briefly topped the 39,000 psychological threshold as sentiment was lifted by a pause in the recent increase of the benchmark 10-year Japanese government bond. A rise in U.S. stock futures also supported the market.

While Bessent's nomination for the U.S. Treasury led to a weaker dollar, it helped boost stocks as "he is believed to take a moderate approach on tariffs, which will be a positive factor for Japanese businesses," said Masahiro Yamaguchi, head of investment research at SMBC Trust Bank.

Nevertheless, some export-oriented issues were sold due to the stronger yen, which reduces exporters' overseas profits when repatriated.

"There is still a sense of uncertainty regarding the Trump administration and concerns that many of his policies, if enacted, will lead to inflation again" in the world's largest economy, Yamaguchi said.