Japanese shares clawed back lost ground to end the morning trade almost flat on Wednesday as investors rushed to buy growth and start-up stocks on continued hopes of a swift recovery from an economic contraction sparked by the coronavirus crisis.

The Nikkei share average edged up 0.1% at 23,115.22, while the broader Topix lost 0.07% to 1,627.35. Earlier in the session, the benchmark index dropped as much as 0.83%.

Both indexes hovered near three-month peaks touched earlier this week.

The rebound came in tandem with gains in U.S. stock futures as hopes of economic recovery after a sharp downturn due to shutdowns continued to underpin the mood.

Takara Bio rose 17.5%, by daily limit, to a seven-year high after the Japanese biotechnology firm said it has developed a method to speed up PCR tests for COVID-19.

The parent company Takara Holdings was the best performer in the Nikkei, with gains of 7.8%.

Growth-oriented shares, which have high valuations because of strong growth expectations, are making a comeback, with the Topix Growth index rising 0.3%. Topix value shed 0.5%.

Among growth shares, Shin-Etsu Chemical rose 2.0%, Astellas Pharma gained 2.0% and Recruit Holdings added 1.3%, while Sony rose 0.8%.

Shares in the Tokyo Stock Exchange's Mothers start-up market also outperformed, with its index rising 1.6% after hitting a 1-1/2-year high.

On the other hand, many of value shares - those with relatively cheap valuations - underperformed following stellar gains in the past couple of weeks.

Constructors fell 1.1% with Shimizu Corp dropping 3.1% and Taisei Corp losing 2.6%.

Steelmakers dropped 1.6%, while insurance companies lost 1.3%, not helped by fall in U.S. bond yields.

Reuters