Tokyo  - The Tokyo market bounced back Thursday after investors were cheered by better-than-expected machinery orders.

The benchmark Nikkei 225 Stock Average gained 158.38 points, or 1.84 per cent, in morning trading to 8,753.39.

The broader Topix index of all first-section issues was also up 12.61 points, or 1.55 per cent, at 827.87.

The Tokyo indices plunged more than 2 per cent Wednesday on concerns about upcoming corporate earnings reports.

But optimism returned Thursday after the government reported key machinery orders were up 1.4 per cent in February from the month before to 728.1 billion yen (7.28 billion dollars). The increase was the first in five months and gave rise to hopes that capital investment is returning and the recession might let up.

On currency markets at 9 am (0000 GMT), the dollar traded at 99.74-79 yen, up from Wednesday's 5 pm quote of 99.66-68 yen.

The euro traded at 1.3240-45 dollars, up from late Wednesday's quote of 1.3188-90 dollars, and at 132.06-11 yen, up from 131.43-47 yen. (dpa)