Japan's Nikkei rallies as US tariff fears ease, yen softens

By Brigid Riley

TOKYO, March 25 (Reuters) - Japan's Nikkei share average rallied in early trade on Tuesday as indications that impending U.S. tariffs against trading partners may be more measured and targeted than previously feared injected fresh optimism into markets.

A softer yen going into the day also gave an additional boost to overall investor sentiment.

The Nikkei .N225 rose 1% to 38,002.70 as of 0010 GMT. The broader Topix .TOPX was up 0.6% after briefly rising as high as 2,818.36, its highest since July 24.

Japanese equities took their cue from all three major U.S. stock indexes finishing sharply higher on Monday, with the S&P 500 closing at its highest in over two weeks as Wall Street took the latest comments from U.S. President Donald Trump as a sign of flexibility on the tariff blitz that has rocked markets..N

The dollar last traded at 150.82 yen JPY=EBS after the Japanese currency depreciated overnight, buoying exporter-related shares that tend to benefit from a softer yen.

Among major shares, automaker Toyota Motor 7203.T and Uniqlo parent firm Fast Retailing 9983.T were up, along with big-name technology shares SoftBank Group 9984.T, Tokyo Electron 8035.T, and Advantest 6857.T.