Japan's Nikkei share gauge surged past the 71,000 level for the first time on Thursday after the United States and Iran extended their ceasefire, easing geopolitical tensions and supporting risk appetite.
The benchmark Nikkei 225 advanced 1.65% to 71,052.30 at the midday break, after touching an intraday high of 71,398.58. The broader Topix gained 1.4% to 4,069.56.
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The U.S. and Iran released the text of an interim agreement to end their war, with U.S. President Donald Trump threatening to resume attacks and kill Iranian officials if they failed to honour their commitments.
Markets in Asia also reacted to a hawkish tilt by the U.S. Federal Reserve, which held interest rates steady. The dollar strengthened broadly, while the yen touched a near two-year low, approaching levels that prompted Tokyo to intervene in markets.
"The Nikkei 225 has risen by more than 5,700 over the past five trading days, making profit-taking likely due to short-term overheating," Takayuki Miyajima, senior economist at Sony Financial Group, said in a note. "Growth expectations for AI and semiconductor-related stocks are likely to continue supporting the market. Furthermore, falling crude oil prices and hopes for an improvement in the situation in the Middle East could provide a tailwind for Japanese stocks."
{{/usCountry}}"The Nikkei 225 has risen by more than 5,700 over the past five trading days, making profit-taking likely due to short-term overheating," Takayuki Miyajima, senior economist at Sony Financial Group, said in a note. "Growth expectations for AI and semiconductor-related stocks are likely to continue supporting the market. Furthermore, falling crude oil prices and hopes for an improvement in the situation in the Middle East could provide a tailwind for Japanese stocks."
{{/usCountry}}Bank shares led sector gains, with Mitsubishi UFJ Financial Group rising 2.96%. Electric appliances and services sectors also outperformed, while marine transportation and oil & coal products lagged. There were 132 advancers on the Nikkei 225 against 92 decliners.
The largest percentage gainers in the Nikkei were Murata Manufacturing, up 12.98%, followed by Ibiden, which was 8.38% higher, and Ajinomoto, which gained 7.40%. The largest losers were Konami Group, down 6.81%, followed by DeNA, 3.76% lower, and Mercari , which lost 3.15%.