Japan's Nikkei Surges as Trump Claims Us Negotiating End to Iran War

TOKYO, March 25 (Reuters) - Japan's Nikkei share average rose the most in a week 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 rose 2.87% to close at 53,749.62, its biggest percentage gain since March 18. The broader Topix .TOPX climbed 2.57% to 3,650.99.

U.S. President Donald Trump said on Tuesday the U.S. was making progress in its efforts to negotiate an end to the war with Iran. Like many global markets, Japanese stocks have gyrated amid conflicting signals about whether the crisis is escalating 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 203 advancers against 22 decliners.

Leading the rally was Tokio Marine Holdings 8766.T, which surged 14.6% 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 11.2%, and SoftBank Group 9984.T, up 7.9%. Both companies have benefited from momentum in artificial intelligence investments.

On the downside, Recruit Holdings 6098.T led decliners with a 1.9% drop, followed by energy explorer Inpex Corp 1605.T, which shed 1.7%.