(MENAFN) Tokyo's financial markets closed sharply higher Thursday, propelled by a powerful surge in artificial intelligence-linked equities as investor confidence in continued expansion intensified.

The benchmark 225-issue Nikkei Stock Average jumped 1,163.74 points—a robust 2.33 percent gain—closing at 51,028.42, up from Wednesday's finish. Meanwhile, the broader Topix index climbed 63.89 points, advancing 1.92 percent to settle at 3,398.21.

AI-powered robotics stocks led the charge, with machinery giant Fanuc rocketing 13.0 percent to 5,953 yen and robotics powerhouse Yaskawa Electric soaring 11.4 percent to reach 4,769 yen.

Across the top-tier Prime Market, wholesale trade, information and communication sectors, and securities house stocks dominated the winners' list.

In bond markets, Japan's benchmark 10-year government bond yield momentarily touched 1.935 percent—the peak level since July 2007—fueling expectations that the Bank of Japan might implement interest rate hikes during its upcoming policy meeting this month.

The climbing yields have triggered fresh concerns that escalating housing loan costs for consumers and elevated borrowing expenses for corporations could potentially dampen economic momentum.

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