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By Kevin Buckland
TOKYO, Sept 25 (Reuters) - Japan's Nikkei share average rebounded sharply on Monday as investors bought back beaten-down stocks following the benchmark index worst week of 2023.
The Nikkei climbed 0.85% to end the day at 32,678.62. The broader Topix rose 0.39%.
Last week, the Nikkei declined every day in a holiday-shortened week punctuated by major central bank meetings, including the U.S. Federal Reserve on Wednesday and Bank of Japan on Friday. The Nikkei's 3.37% tumble was its worst weekly performance this year.
The spring back from that is "a big factor" in the Nikkei's Monday rally, said Maki Sawada, a strategist at Nomura Securities.
In addition, "the big central bank events of last week passed without major market ructions, so there's a sense of relief", she said.
The Nikkei dipped to a one-month low of 32,154.53 on Friday, sharply dropping from a 2-1/2-month peak at 33,428.44 a week earlier.
Healthcare was the top performing sector in the latest session, jumping 2.69%, lifted by a 7.56% surge for the Nikkei's top performing stock, Daiichi Sankyo.
The drugmaker is jointly developing a breast cancer drug with AstraZeneca, which said late last week the experimental treatment slowed progression of the disease in a late-stage trial.
Tech shares rebounded, tracking gains for U.S. peers from Friday. Chip-testing equipment maker Advantest rallied 3.87%, while chip-making equipment maker SCREEN Holdings advanced 4.89%.
Meanwhile, stocks that had outperformed last week were offloaded, with banks shedding 2.62% and shippers falling 1.94%. The top five Nikkei decliners were all lenders, led by a 3.27% slide for Fukuoka Financial Group .
Monday's price action "is more technical, rather than being driven by fundamentals," said Kelvin Wong, an analyst at OANDA.
However, Wong remains optimistic though that the Nikkei can reach as high as 34,000 by year-end.
"The sustainability of the rally depends mostly on the domestic economy," he said. (Reporting by Kevin Buckland; Editing by Rashmi Aich)