Japan’s Nikkei share average closed higher on Tuesday as optimism grew from reports that Tehran is considering attending peace talks with Washington in Pakistan, lifting risk appetite and prompting investors to buy domestic heavyweight tech stocks.
The Nikkei rose 0.89% to 59,349.17. The broader Topix gave up early gains to end 0.18% lower at 3,770.38.
The United States expressed confidence that peace talks with Iran would go ahead in Pakistan and a senior Iranian official said Tehran was considering joining, but significant hurdles and uncertainty remained as the end of the ceasefire approached.
In Japan, chip-related shares climbed, with Tokyo Electron and Advantest up 3.46% and 0.37%, respectively.
Kioxia Holdings jumped 7.31% and technology investor SoftBank Group surged 8.53%.
“The market might be too optimistic about the aftermath of the war. There is a concern about the impact of the disruption of the supply chain,” said Takamasa Ikeda, senior portfolio manager at GCI Asset Management.
“There may be a big correction of the stock market in the summer if the impact of the supply shortage surfaces.”
Ikeda noted that tightened supply of helium, a key component in cable productions, could weigh on Japan’s high-performing fibre optic cable makers, including Fujikura and Furukawa Electric.
Fujikura rose 6.51% on Tuesday, while Furukawa gained 2.76%.
In other stock movements, Nojima surged 14.18% following reports that the electronics retailer plans to acquire Hitachi’s consumer appliances unit, Hitachi Global Life Solutions, for more than 100 billion yen ($630.32 million).
Hitachi shares edged 0.7% higher.
Banking shares declined, with Mitsubishi UFJ Financial Group and Mizuho Financial Group down 1.39% and 1.89%, respectively.
Toyota Motor lost 3.24% in early trade.
Of the more than 1,600 stocks traded on the Tokyo Stock Exchange’s prime market, 32% rose, 64% declined and 3% remained unchanged.
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