Japan's Nikkei jumps on renewed hopes for Middle East peace

TOKYO: Japan’s Nikkei share average jumped more than 4% on Friday as investors scooped up stocks on renewed hopes for peace in the Middle East after US President Donald Trump said he had cancelled planned strikes against Iran.

The Nikkei was up 3.8% at 66,658.59 as of 0217 GMT after rising more than 4.4% earlier in the session.

The index gave up some of its gains after the special quotation prices used to set the values of index options and futures were set.

The broader Topix gained 2.06% to 3,909.14.

President Donald Trump on Thursday said the United States and Iran could sign a peace deal as soon as this weekend that would reopen the Strait of Hormuz to shipping, but Iran countered that it had not reached a final decision on an agreement.

In Japan, technology shares led the Nikkei’s gain, with chip-related Advantest and Tokyo Electron jumping 8.8% and 10.17%, respectively.

Bank shares rose ahead of the Bank of Japan’s policy meeting next week, where the BOJ is set to raise the policy rate to a 31-year high of 1%.

Mitsubishi UFJ Financial Group and Mizuho Financial Group rose 1.1% and 3.27%, respectively.

The expectations for higher interest rates have pushed the bank index about 30% so far this year.

Still, the index hovers at the same level as in mid-February, before the Middle East war broke out, and underperforms a 70% gain of the nonferrous sector, where makers of fiber-optic cable used by AI data centers, such as Fujikura and Furukawa Electric belong.

“This signals the instability of the equity market. Investors have not yet started rotating their targets toward a wide variety of stocks,” said Takamasa Ikeda, a senior portfolio manager at GCI Asset Management.

Staffing agency Recruit Holdings and camera and audio equipment maker Sony Group fell more than 3% each.

All but six of the Tokyo Stock Exchange’s 33 industry sub-indices rose.

The mining sector and the shipping sector fell 0.8% and 0.2%, respectively.