TOKYO (Kyodo) -- Tokyo stocks soared Tuesday, with the benchmark Nikkei index briefly rising nearly 1,000 points to finish above the 40,000 line, as investors snapped up chip stocks on renewed expectations for solid demand.

The 225-issue Nikkei Stock Average ended up 776.25 points, or 1.97 percent, from Monday at 40,083.30. The broader Topix index finished 30.19 points, or 1.10 percent, higher at 2,786.57.

On the top-tier Prime Market, gainers were led by electric appliance, service and bank issues.

The U.S. dollar was firmer partly on buying by domestic importers, rising well above the 158 yen line -- its highest level since July -- before the U.S. currency gave up some of its earlier gains due to uncertainties over U.S. President-elect Donald Trump's trade policies, dealers said.

At 5 p.m., the dollar fetched 157.48-51 yen compared with 157.57-67 yen in New York and 157.66-68 yen in Tokyo at 5 p.m. Monday.

The euro was quoted at $1.0414-0415 and 164.02-06 yen against $1.0385-0395 and 163.73-83 yen in New York and $1.0327-0328 and 162.82-86 yen in Tokyo late Monday afternoon.

The yield on the benchmark 10-year Japanese government bond ended at 1.125 percent, unchanged from its close on Monday.

On the stock market, market players confirmed firm chip demand again from recent upbeat earnings from Taiwanese electronics giant Hon Hai Precision Industry, brokers said.

Investors also view some Japanese semiconductor-related stocks, such as Tokyo Electron, as undervalued after not fully recovering from a Tokyo market plunge in August last year, said Koichi Fujishiro, senior economist at the Dai-ichi Life Research Institute.

Fujishiro also said investors grew more hopeful that Trump may not impose universal tariffs as initially expected, after a U.S. media report said Monday that his aides are exploring tariff plans that would be applied to every country but only cover critical imports, although Trump later denied the report.