Japan’s Nikkei share average surged 6.5% on Tuesday, rebounding sharply from a 1.5-year low hit in the previous session. The rally was driven by investor confidence sparked by signs of a U.S. market recovery and optimism over easing U.S.-Japan trade tensions. The broader Topix index also jumped 6.8% to 2,444.44, with all 33 Tokyo Stock Exchange sub-indexes closing higher.
Market sentiment improved as U.S. stock futures rose during Asian trading hours, encouraging dip-buying. Takamasa Ikeda, senior portfolio manager at GCI Asset Management, noted that investors saw shares as oversold and reacted positively to cues of a rebound in U.S. equities. The U.S. semiconductor index climbed 2.7% overnight, while S&P 500 and Nasdaq futures gained over 1% in Asia.
Despite recent volatility, the Nikkei and Topix remain down about 13% from their levels before U.S. President Donald Trump’s tariff announcement, which raised concerns about Japan’s export-reliant economy. However, hopes for a negotiated resolution between Tokyo and Washington offered a positive outlook. Japanese Prime Minister Shigeru Ishiba reportedly expressed his concerns about the tariffs during a call with President Trump.
Leading the rally were technology and financial stocks. Tokyo Electron soared 8.6%, Advantest jumped 11.6%, and cable maker Fujikura skyrocketed 19%, reflecting strong demand for semiconductor and data center-related equipment. Bank shares also surged, with Mitsubishi UFJ up 12.3% and Mizuho Financial Group rising 14%. The insurance sector posted a 12.5% gain, while the banking index climbed 11.6%.
The sharp rebound in Japan’s stock market reflects growing investor optimism and highlights the influence of global market trends and diplomatic developments on Japanese equities.


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