TOKYO, OCT. 3 (WEDNESDAY) -- The atmosphere of financial crisis that was gripping Japan eased Tuesday following a spectacular 13 percent rise on the Tokyo Stock Exchange.

The market continued to climb today, with the Nikkei stock index gaining 1.4 percent in the two-hour morning session to close at 23,229.57.

Tuesday's rally, the biggest in Japan's history, was triggered by a government announcement of measures aimed at boosting market confidence, plus a slew of favorable news including falling oil prices, lower interest rates, sharp rises in foreign stock markets and agreement on a U.S. deficit-cutting plan.

But the magnitude of Tuesday's surge -- a 2,676.75-point rise in the Nikkei -- left analysts uneasy about the market's future direction.

If anything, some experts said, the market's sudden change from utter despair to unbridled euphoria underscores how group-oriented Japanese investors are exceptionally susceptible to a mass stampede.

"For the past week, everyone wanted to sell; today {Tuesday}, everyone wanted to buy," said Peter Tasker, market strategist at Kleinwort Benson International. "Everyone here wants to do exactly the same thing at exactly the same time; people are very hazy about what the correct valuation of a stock is."

In Japan, Tasker added dryly, "there aren't very many contrarians."

The activity in Tuesday's market provided a vivid example of what Tasker was talking about: Tuesday morning, so many investors were clamoring to buy -- and so few offering to sell -- that trading proved impossible for about one-third of the listed shares during the morning session.

The market advance evoked sighs of relief throughout Tokyo's financial district because during the previous five trading sessions, the Nikkei had lost 3,555.97 points. Coming on top of a nine-month slide in share prices, the recent decline had aroused fears that Japan's vaunted economy and banking system were imperiled.

The rally Tuesday far surpassed the previous record increase of 9.3 percent for a single day's trading, which was set immediately after the October 1987 crash.

But the development also left analysts shaking their heads over the degree to which financial markets here are dominated by Japanese group-think, both when the market is headed up and when it is headed down.

Japan's stock market is hardly the only one in the world affected by herd instinct, of course. And many Japanese contend that it is less volatile than the U.S. market, which is often criticized because of the alleged influence of computer-driven trading in exacerbating price moves.

But many experts believe that among the stock markets of industrialized countries, Japan's is probably the most lemming-like. They cite as evidence the spectacular market rise of the 1980s, in which investors bid prices up to levels greater than 60 times company profits, in the apparent expectation that stocks would continue rising forever.

"When there's a move in one direction, people pile in -- that's the way the Japanese market has been run for the past 35 years," said Paul Summerville, senior economist at the Tokyo office of Jardine Fleming Securities. " 'What's Nomura {the giant Japanese securities firm} pushing today?' -- that's the question you ask when you get up in the morning."

Much more so than other major markets, Japan's is dominated by a handful of big firms, and these firms, along with institutional investors, are often subject to quiet direction from the powerful Ministry of Finance.

But the financial system has been undergoing fundamental changes, including some deregulation, and what is remarkable about the latest market developments is that the Finance Ministry failed to marshal a unified market-rescue effort by the major firms, according to Japanese press reports.

Instead, Tuesday's rally came only after Finance Minister Ryutaro Hashimoto on Monday announced several confidence-building measures, including a new rule allowing insurance companies to devote more of their huge cash hoards to short-term stock purchases. He also intimated that Japan's central bank would lower interest rates before too long.

Hashimoto's hint that lower interest rates might be on the way gained some credibility from the fact that oil prices were falling and an agreement between the White House and Congress had been announced on the deficit.

"An awful lot of strong positives have come into the market at one time," said Lawrence Prager, strategist at Nikko Securities Ltd. Still, Prager added, "It's kind of hard for me to justify 13 percent in one day."