Japanese Shares Rally on US-Iran Deal Hopes

The Nikkei 225 Index jumped 4% toward 67,000, while the broader Topix Index climbed 2.1% to 3,910 on Friday, as Japanese equities rebounded from earlier-week losses after President Donald Trump said a peace agreement with Iran could be signed as soon as this weekend in Europe, sending oil prices sharply lower. Investor sentiment was also lifted ahead of SpaceX's Wall Street debut, with the company expected to raise about $75 billion at a projected market valuation of $1.78 trillion. Technology and AI-related stocks led the gains, with Kioxia Holdings rising 6%, Tokyo Electron surging 10%, SoftBank Group adding 3.4%, Advantest advancing 8.7%, and Taiyo Yuden soaring 13%. Financial and consumer shares also strengthened, including Mitsubishi UFJ up 1.1%, Sumitomo Mitsui gaining 2.3%, and Fast Retailing rising 1.9%.

The Nikkei 225 Index edged up 0.06% to close at 64,217 on Thursday, recovering after tumbling as much as 2.87% earlier in the session as the US military announced it had completed its latest strikes on Iran, boosting hopes that peace negotiations could resume. However, technology stocks remained under pressure amid lingering concerns over elevated AI-related valuations, weighing on Japanese companies with significant exposure to the global AI boom. Domestically, the Bank of Japan is widely expected to raise interest rates next week as policymakers grapple with soaring energy costs linked to the Middle East conflict. Among individual stocks, Kioxia Holdings (7%), Taiyo Yuden (6.2%), and Murata Manufacturing (3.7%) posted strong gains, while SoftBank Group (-1.4%), Fujikura (-1.2%), and Toyota Motor (-2.4%) ended sharply lower.

The Nikkei 225 Index decreased 71 points or 0.11 percent on Thursday to close at 64108 points. The decline was led by Hino Motors (-5.42%), Kawasaki (-4.21%) and Toho Zinc (-4.13%). On the upside, the strongest performers were Toppan (15.07%), Ajinomoto (8.37%) and Resonac Holdings (6.59%).