iShares MSCI Japan (EWJ), the largest exchange traded fund by assets that invests in Japan, received an inflow of $692 million Tuesday, TrimTabs Investment Research calculated.

On Wednesday, Japanese stocks rebounded sharply, recovering some of the ground they lost due to a worsening crisis at a Japanese nuclear plant crippled by the recent tsunami.

The inflow into the ETF is the largest single-day inflow for the fund since it was launched in March 1996, according to TrimTabs. The inflow was equivalent to about 12.4% of the ETF's total assets on Monday. As of Tuesday, the fund's total assets stood at $6.26 billion, TrimTabs said.

The inflow showed that investors were "being optimistic on the situation in Japan," says Minyi Chen, Asia equity analyst at TrimTabs. TrimTabs calculates the flows based on publicly available data about the fund.

The fund's top holdings as of the end of February include Toyota Motor Corp. (7203.TO,TM), Honda Motor Co. (7267.TO,HMC) and Mitsubishi UFJ Financial Group (MTU,8306.TO), according to the fund company's website. Exchange traded funds hold baskets of stocks like mutual funds, but their shares are traded on exchanges.

"Look at the size of the inflow [Tuesday] and you realize that so many are buying the dip," says Chen. "I guess they are just hoping once the nuclear plant crisis is solved we'll see a quick recovery. Meanwhile, the Japanese government is pumping liquidity into the market and investors have reason to believe that [Bank of Japan] will prevent the market from melting down."

The final outcome of the Japanese nuclear plant crisis remains unresolved. U.S. stocks sank deeper into the red on Wednesday as worries rose that the crisis was intensifying.

Japan's Nikkei stock index gained 5.7% on Wednesday, recouping some of the 16% swoon of the prior two days and taking some pressure off global markets. The Bank of Japan was actively injecting liquidity into the market again on Wednesday.

iShares MSCI Japan recently traded at $9.62, down 4.1%.

-By Aparajita Saha-Bubna, Dow Jones Newswires; 617-654-6729; aparajita.saha-bubna@dowjones.com