Japan Stocks Advance As Iran Deal Hopes Boost Risk Appetite

Japanese shares surged on Friday, with the benchmark Nikkei posting its biggest single-day gain since late May, as investors welcomed signs of potential progress in negotiations between the U.S. and Iran.

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The Nikkei 225 climbed 2.8% to close at 66,020.04, while the broader Topix index gained 1.4% to 3,881.96. The advance ended a two-session losing streak for the Topix and was led by technology, electronics and banking stocks.

Chip-related counters were among the strongest performers. Tokyo Electron and Disco Corp. contributed significantly to gains on the Nikkei, while memory chip maker Kioxia Holdings and semiconductor testing equipment manufacturer Advantest rose more than 7% during the session.

Oil Prices Retreat As Tensions Ease

Investor sentiment improved after Trump indicated that a potential agreement with Iran could be reached soon. The news of some progress in negotiations eased fears of long-lasting disruptions in the world’s energy supply. The statements resulted in a fall in oil prices as investors looked at the risk premium accumulated due to months of political uncertainties in West Asia.

The Strait of Hormuz continues to be a cause of worry in the global energy market. Before the conflict, Japan sourced more than 90% of its crude oil imports from the Middle East. Supply concerns in recent months had weighed on Japanese manufacturers and raised input costs for several industries. Lower crude oil prices are generally viewed as supportive for Japan’s economy, given its dependence on imported energy.

Technology Stocks Rebound

The easing of geopolitical concerns prompted renewed buying in technology shares, many of which had come under pressure earlier in the week.

The recovery in semiconductor stocks lifted broader market sentiment, with electronics emerging as one of the best-performing sectors on the Topix. Banking shares also advanced, contributing to the index’s overall gain. Improved risk appetite was reflected across regional markets as investors shifted back toward equities following signs of de-escalation in West Asia.

SpaceX IPO Also In Focus

Market participants were also tracking developments in the U.S. technology sector ahead of the listing of SpaceX. The aerospace and satellite company raised $75 billion through its initial public offering, making it the largest IPO on record. The offering valued the company at approximately $1.77 trillion, with trading scheduled to begin in the U.S. on Friday.

Global investors remained focused on strong fundraising, especially in the technology and growth sectors. Friday’s gains in Japanese equities reflected improving sentiment across global markets, supported by easing geopolitical concerns, lower energy prices and renewed interest in technology shares. The combination helped lift both the Nikkei and Topix to their strongest daily performances in recent weeks.