Tokyo stocks closed higher Thursday as a return in risk appetite following a global equities rout earlier in the week saw investors seek out bargains with sentiment bolstered by the yen's retreat against the U.S. dollar.

The 225-issue Nikkei Stock Average gained 245.49 points, or 1.13 percent, from Wednesday to close the day at 21,890.86.

The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, added 15.78 points, or 0.90 percent, to finish at 1,765.69.

Investors bought on dips in early trade following a broad selloff on Tuesday and stocks recouping some ground Wednesday, with sentiment bolstered by some solid domestic earnings from companies here, investment managers said.

But market volatility continued owing to an overnight rise in U.S. Treasury yields once again spooking investors and reigniting concerns about inflationary pressure in the United States and increased borrowing costs if the central bank hikes rates at a pace previously unexpected, market analysts here said.

Trading see-sawed in later moves, but the market was propped up by the yen retreating against the U.S. dollar and giving export issues, which broadly affect the wider market, a boost.

By the close of play, transportation equipment, glass and ceramics product and rubber product-oriented issues comprised those that gained the most by the close of play, and rising issues outpaced falling ones by 1,485 to 509 on the First Section, while 71 ended the day unchanged.

On the main section on Thursday, 1,820.42 million shares changed hands, dropping from Wednesday's volume of 2,336.29 million shares.

The turnover on the penultimate trading day of the week came to 3,549.5 billion yen (32.40 billion U.S. dollars).