TOKYO, Nov 1 (Reuters) - Japan's Nikkei share average traded sharply higher on Wednesday as investors scooped up stocks after the Bank of Japan (BOJ) adopted a dovish monetary policy stance a day earlier.

The Nikkei was up 2% to 31,475.62 by the midday break, while the broader Topix advanced 2.15% to 2,391.13.

"Investors who braced for a hawkish shift in the BOJ's policy were relieved and bought back stocks to cover their short positions," said Shigetoshi Kamada, general manager of the research department at Tachibana Securities.

"The BOJ said it would patiently maintain its ultra-loose policy, which is a sharp contrast to the U.S. Federal Reserve, which tries to contain inflation with monetary tightening."

The BOJ on Tuesday further loosened its grip on long-term interest rates by tweaking its bond yield control policy again, but it kept ultra-low interest rates steady.

An overnight strong finish on Wall street and robust outlook for domestic corporates has also boosted risk appetite, strategists said.

Toyota Motor rose 4.38% ahead of an announcement of its outlook later in the day. Its autoparts affiliates Denso and Aisin both raised their annual profit forecast, raising expectations that Toyota may also lift its forecast, said Ikuo Mitsui, fund manager at Aizawa Securities.

All but one of the Tokyo Stock Exchange's 33 industry sub-indexes rose, with the auto and autoparts sector jumping 4.07% to lead the gains.

Bucking the trend, Advantest tanked 6.79% after the chip-testing equipment maker downgraded its full-year operating profit forecast. (Reporting by Junko Fujita; Editing by Sonia Cheema)