Japan’s Nikkei tops 62,000 for first time as Iran peace hopes fuel Asia rally

Japan’s benchmark Nikkei index surged past the 62,000 mark for the first time on Thursday, leading a broader rally across Asian markets as investors cheered strong technology earnings, easing fears over the Iran conflict and a rebound in the Japanese yen.

The historic jump came after Japanese markets reopened from a long holiday, allowing investors to catch up with a global equity rally driven by artificial intelligence optimism and hopes of a potential peace agreement in West Asia.

The Nikkei 225 rose more than 3 per cent in early trade, while the broader Topix index also gained sharply. The rally mirrored record-breaking moves on Wall Street overnight, where technology stocks pushed the S&P 500 and Nasdaq Composite to fresh highs after upbeat earnings from chipmakers and AI-linked firms.

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Investor sentiment improved further after Iran said it was reviewing a US-backed peace proposal that could formally end the conflict that has disrupted energy markets since late February. US President Donald Trump also said talks with Tehran had been “very good”, raising hopes that tensions in the region may gradually ease.

The prospect of a diplomatic breakthrough triggered a sharp decline in oil prices on Wednesday, with Brent crude tumbling nearly 8 per cent before stabilising near $102 a barrel in Asian trading on Thursday. Even after the drop, oil prices remain around 40 per cent higher than pre-war levels, highlighting lingering inflation risks for the global economy.

Asian equities broadly extended gains on the improving geopolitical outlook. MSCI’s broadest index of Asia-Pacific shares outside Japan climbed to another all-time high and has gained roughly 7 per cent this week.

Japan’s markets were also buoyed by a stronger yen following renewed speculation that Tokyo had intervened in currency markets to support the battered Japanese currency.

The yen surged abruptly on Wednesday, strengthening from around 157.8 per dollar to nearly 155 within half an hour during thin holiday trading, fuelling expectations of official action by Japanese authorities.

Currency intervention has become a major focus for investors as the yen’s prolonged weakness has raised concerns about imported inflation and financial market instability in Japan.

According to a report by the Nikkei newspaper, US Treasury Secretary Scott Bessent is expected to visit Japan next week for talks with Prime Minister Sanae Takaichi, Finance Minister Satsuki Katayama and Bank of Japan Governor Kazuo Ueda.

The discussions are expected to focus on curbing speculative selling of the yen, strengthening coordination on currency markets and broader economic security issues including rare earth supplies, energy procurement and the Iran conflict.