TOKYO (Kyodo) -- Tokyo stocks surged Wednesday morning, lifted by overnight gains on Wall Street amid expectations that the U.S. Federal Reserve will cut interest rates further next month to support the world's largest economy.

The 225-issue Nikkei Stock Average advanced 946.05 points, or 1.94 percent, from Tuesday to 49,605.57. The broader Topix index was up 60.36 points, or 1.83 percent, at 3,351.25.

Almost all industry sectors advanced on the top-tier Prime Market, with gainers led by securities house, electric power and gas, information and communication issues.

The U.S. dollar fell to the upper 155 yen range in Tokyo amid increasing speculation about further monetary easing by the U.S. central bank, dealers said.

At noon, the dollar fetched 155.85-86 yen compared with 155.99-156.09 yen in New York and 156.62-64 yen in Tokyo at 5 p.m. Tuesday.

The euro was quoted at $1.1581-1583 and 180.49-53 yen against $1.1563-1573 and 180.47-57 yen in New York and $1.1523-1524 and 180.48-52 yen in Tokyo late Tuesday afternoon.

Stocks were widely bought after weaker-than-expected U.S. retail sales and consumer confidence data fueled expectations that the Fed will cut interest rates again next month.

Hopes for an additional Fed rate cut were also boosted by a Bloomberg report that White House economic adviser Kevin Hassett, known as a proponent of rate cuts, has emerged as the frontrunner to be the next Fed chief, brokers said.

The upward momentum was also added by buybacks of heavyweight SoftBank Group following a plunge the previous day.