(REUTERS) -- Japan's Nikkei average rose to its highest closing level in nearly two weeks on Wednesday with traders citing a boost from large programme trade in the afternoon, while electrical wire companies were the small-cap favorite of the day.
Tokyo Electric Power Co jumped 7.8 percent and topped Japan's bluechip list as the biggest percentage gainer, after the utility said on Tuesday it will hike electricity rates for businesses by an average 17 percent as it struggles with massive costs in the aftermath of the Fukushima nuclear crisis.
The Nikkei gained 1 percent to 8,550.58, soaring past its 25-day moving average near 8,453 in a rise that traders attributed to technical short-covering after stop losses on Nikkei futures were triggered.
There were stops triggered at around 8,510, 8,520, 8,530. We saw some buying in the Nikkei futures. You have some stops triggered and that was the initial reason for the spike. It is essentially followed by short-covering, said Stefan Worrall, director of equity cash sales at Credit Suisse in Tokyo.
The broader Topix climbed 0.5 percent to 734.98.
Electrical wire and cable makers outperformed the broader market and won the biggest percentage gains on Wednesday. Totoku Electric Co Ltd soared 21.4 percent, while rival SWCC Showa Holdings climbed 11 percent and Oki Electric Cable Co Ltd gained 4.4 percent.
Investors continue to pick up smaller stocks and now we're looking to see if the gains will extend over to the main names, which have been losing for some time now, said Hiroyuki Fukunaga, CEO of Investrust.
Trading volume is steadily rising and it looks as though these penny stocks have become a sort of pillar for this market, he said.
Volume spiked on Wednesday, with 2.36 billion shares changing hands on the main board, up from 1.76 billion shares on Tuesday.
Lagging behind were construction companies, with the sector index losing 0.7 after rallying 3.1 percent in the previous session -- its biggest one-day percentage gain since last March.
The sector gauge has risen more than 6 percent so far this year compared with a flat Topix index, but it carries a similar 12-month forward price-earnings ratio to the Topix at 11.6.
Japan Bridge Corp bucked the trend, extending its recent rally and ending up by its daily limit, a rise of 20.6 percent. The stock has soared more than 268 percent this year.