Japan’s Nikkei share average concluded the trading session on Friday with an increase of nearly 3%, as investors seized the opportunity to acquire stocks following U.S. President Donald Trump’s remarks regarding a potential peace agreement with Iran. The Nikkei closed up 2.81% at 66,020.04 after rising as much as 4.4% earlier in the session. In a week characterised by volatility, the index experienced a decline of 0.85%, thereby ending a three-week period of gains. The broader Topix gained 1.35% to 3,881.96. On Thursday, Trump indicated that a peace deal between the U.S. and Iran could be finalised as early as this weekend, potentially allowing for the reopening of the Strait of Hormuz to shipping. However, Iran responded by stating that it had not yet made a definitive decision regarding the agreement.

Chip-related shares propelled the Nikkei’s ascent, with Advantest surging by 8.54% and Tokyo Electron increasing by 7.26%, respectively. Bank shares experienced an uptick in anticipation of the Bank of Japan’s forthcoming policy meeting, during which the central bank is expected to elevate the policy rate to a 31-year peak of 1%. Mitsubishi UFJ Financial Group and Mizuho Financial Group saw increases of 0.67% and 2.29%, respectively. For the year to date, the bank index is up 30% and remains at the same level as in mid-February, prior to the onset of the conflict in the Middle East.

It underperforms a 68% gain of the nonferrous sector, where makers of fibre-optic cables such as Fujikura and Furukawa Electric, used by AI data centres, belong. “This signals the instability of the equity market. Investors have not yet started rotating their targets toward a wide variety of stocks,” said Takamasa Ikeda. Staffing agency Recruit Holdings and electronic component maker Murata Manufacturing experienced declines of 3.27% and 4.58%, respectively, contributing significantly to the downward pressure on the Nikkei index. Camera and audio equipment maker Sony Group experienced a decline of 2.29%.