TOKYO, May 18 (Reuters) - Japanese shares jumped on Tuesday as investors shrugged off data showing the economy slipped back into contraction, and picked up stocks whose valuations took a beating in recent sell-offs. The Nikkei share average advanced 2.09% to close at 28,406.84, recovering from a four-month low hit last week, while the broader Topix added 1.54% to 1,907.74. Japan’s economy shrank more than expected in the first quarter as a slow vaccine rollout and new COVID-19 infections hit spending on items such as dining out and clothes. “The market has reached near its fair value, so it has found a bottom for now,” said Nobuhiko Kuramochi, a senior strategist at Mizuho Securities. Recruit Holdings, the seventh-biggest Japanese company by market capitalisation, jumped 7.19% after the staffing agency gave a strong outlook for the current financial year. Mitsubishi UFJ Financial Group rose 2.3% after the country’s top banking group announced a dividend hike and a stronger-than-expected profit forecast for the current year. “Investors have had a second look at corporate earnings. Some companies were sold down as they missed market consensus by a small margin but there is a chance that they may raise their forecasts later in the year,” said Jun Morita, general manager of the research department at Chibagin Asset Management. Chipmaking equipment maker Tokyo Electron, which has lost 6.29% this month despite strong results, gained 1.3%. Shares of department stores rose after investors bought them back on expectations that local coronavirus infections would ease soon as the government has imposed restrictions and rolled out a mass vaccination programme. J.Front Retailing rose 3.18%, while Isetan Mitsukoshi gained 3.64%. Insurers also advanced as elevated U.S. bond yields were seen helping boost their future investment returns. T&D Holdings jumped 7.47%, while Dai-ichi Life Holdings rose 5.82%. (Reporting by Hideyuki Sano and Junko Fujita, Editing by Sherry Jacob-Phillips and Subhranshu Sahu) Our Standards: The Thomson Reuters Trust Principles.