TOKYO: Nikkei share average rallied on Tuesday to levels not seen since the start of the war in Iran as optimism over negotiations to end the conflict sent oil prices lower.
The benchmark Nikkei 225 Index jumped 2.43% to 57,877.39, its highest close since March 2, while the broader Topix climbed 0.87% to 3,755.27.
The Nikkei closed at an all-time high on February 26, the day before the U.S. and Israel began aerial bombardments of Iran, triggering a conflict that has halted nearly all oil shipments from the region.
Although ceasefire talks over the weekend broke down, U.S. Vice President JD Vance said in an interview with Fox News that progress has been made in negotiations and Washington expects Iran to proceed with reopening the Strait of Hormuz shipping lane.
U.S. crude fell 1.57% to $97.52 a barrel and Brent traded at $98.83 per barrel, down 0.54% on the day.
"Of course, there is a risk that the situation could deteriorate again, but with market sentiment somewhat calmer, the focus will shift to corporate earnings, which are set to pick up momentum," said Maki Sawada, an equities strategist at Nomura Securities.
"Whether the Nikkei will return to the levels seen before the conflict began will depend on results starting in late April."
There were 137 advancers in the Nikkei index against 87 decliners. Semiconductor-related companies and firms in the artificial intelligence sector, which has massive energy needs, were the sharpest gainers.
AI investor SoftBank Group led gains in the Nikkei, with a 12.7% surge, followed by chipmaker Kioxia, up 11.9%, and tech-sector supplier Advantest, which rose 8.5%. - Reuters
