TOKYO: Japan’s Nikkei share average advanced on Tuesday, tracking overnight Wall Street gains, following signs of a potential de-escalation of tensions in the Middle East.
The equity market largely shrugged off the Bank of Japan’s decision to slow its pace of government bond purchase reductions from next April, and keep interest rates steady, as expected.
The Nikkei rose 0.6% to 38,524.52, as of 0346 GMT, shortly after the central bank’s announcement.
The broader Topix added 0.3%. All three major US stock indexes advanced strongly on Monday as market sentiment improved with Iran seeking a ceasefire with Israel.
Meanwhile, the BOJ maintained short-term rates at 0.5% by a unanimous vote at the two-day policy meeting that ended on Tuesday.
At the same time, BOJ Governor Kazuo Ueda is likely to reiterate a commitment to raising rates when he holds a press conference at 0630 GMT, despite rising uncertainty from US trade tariffs and global conflicts including in the Middle East.
Under its fiscal 2026 plan starting in April, the BOJ will reduce monthly bond buying by 200 billion yen ($1.38 billion) each quarter, reducing the total to around 2 trillion yen by March 2027.
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Japanese growth shares outperformed, with a Topix index of the securities up 0.5%, compared with a 0.2% rise for value shares.
Chip-related stocks were among the Nikkei’s top performers. Disco was the biggest percentage gainer with a 6.5% surge. Advantest climbed 2.8% and Tokyo Electron advanced 3.2%.
Out of the Nikkei’s 225 components, 139 rose, 83 fell and three traded flat.
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