The Nikkei average jumped 1.43 percent to 40,150.79, marking its highest closing level since December 27. The broader Topix index settled 1.28 percent higher at 2,840.54.

Technology stocks followed their U.S. peers higher, supported by positive news around easing tensions in the Middle East and expectations for Fed rate cuts this year. Tokyo Electron surged 4.3 percent and SoftBank Group rallied 2.5 percent.

Defense-related Kawasaki Heavy Industries soared 6.2 percent on expectations of increased defense spending in the country.

Automakers Honda, Toyota and Nissan all gained around 3 percent, tracking a weaker yen as Tokyo's CPI data for June 2025 revealed a milder inflation trajectory than anticipated.

Powered by Capital Market - Live News