Japan's Nikkei surges as optimism for Iran peace plan lifts sentiment

By Rocky Swift

TOKYO, March 25 (Reuters) - Japan's Nikkei share average climbed roughly 3% on Wednesday, supported by cautious optimism that the Middle East crisis could move toward a potential settlement after recent volatility.

The benchmark Nikkei 225 Index .N225 advanced 2.93% to 53,784.43. The broader Topix .TOPX climbed 2.5% to 3,648.78.

U.S. President Donald Trump said on Tuesday the U.S. was making progress in its efforts to negotiate an end to war with Iran. Like many global markets, Japanese stocks have gyrated on conflicting signs of escalation of the crisis or an off-ramp to hostilities.

Because of its dependence on imported energy, Japan's economy is particularly vulnerable to the conflict's impact on oil shipments and prices. The sharp decline in crude on Wednesday appeared to be the trigger for a jump in the Nikkei, said Wataru Akiyama, a strategist at Nomura Securities.

"Expectations for a lowering of tensions in the Middle East appear to be driving the stock market higher," Akiyama said. "However, the sense of uncertainty has not yet been completely eliminated."

Japan's Nikkei 225 saw broad-based gains, with 211 stocks advancing compared with just 14 decliners.

Leading the rally was Tokio Marine Holdings 8766.T, which surged 9.8% and climbed for a second consecutive session after Berkshire Hathaway BRKa.N disclosed it had acquired a stake in the insurer.

It was followed by strong performances from Furukawa Electric 5801.T, which rose 8.7%, and SoftBank Group 9984.T, up 8%. Both companies benefited from continued momentum in artificial intelligence-related investments.

On the downside, Inpex Corporation 1605.T slipped 2.6%, making it the biggest laggard of the session, followed by Nomura Research Institute 4307.T, which declined 2.2%.