Japan's Nikkei rises as investors weigh possible flexibility on tariffs

By Brigid Riley

TOKYO, March 26 (Reuters) - Japan's Nikkei share average rose on Wednesday as investors held on to hopes that U.S. President Donald Trump may approach tariffs with more flexibility than previously anticipated while announcing more reciprocal levies next week.

The Nikkei .N225 closed up 0.7% at 38,027.29, marking a second consecutive day of gains. It earlier rose a little more than 1% to touch a one-month intraday high of 38,220.69.

The broader Topix .TOPX gained 0.6% to finish at 2,812.89.

Market players were leaning into a more optimistic view after Trump said on Monday automobile tariffs were coming soon but indicated that not all of his threatened levies would be imposed next week and that some countries may get breaks.

All three of Wall Street's main stock indexes ended higher on Tuesday, albeit by small amounts, in a boost to investor sentiment. .N

The direction of equities depends on U.S. tariff policies, but Rakuten Securities' chief strategist Masayuki Kubota said he expects the Trump administration to take a more measured approach to avoid a recession in the U.S. and global economy.

"There may be some shock in the market when various announcements are made in April, but I think that this will present a good buying opportunity," he said.

Semiconductor-related shares extended gains in afternoon trade to support the overall Nikkei, with chip-making equipment major Tokyo Electron 8035.T rising 1.6% and AI-focused startup investor SoftBank Group 9984.T gaining 1.4%.

Chip-testing equipment maker Advantest 6857.T ticked up 0.6%.

The yen was somewhat softer at 150.57 per U.S. dollar JPY=EBS, helping to lift Japanese automakers and other exporter shares. Toyota Motor 7203.T reversed losses to end up 0.2% and Honda Motor 7267.T narrowed losses, down 0.7%.

Nintendo 7974.T surged 5.3% to become one of the top percentage gainers on the Nikkei, while entertainment conglomerate Sony Group 6758.T added 2.3%.

Among other major shares, Uniqlo parent firm Fast Retailing 9983.T jumped 1.5%.