Japan’s Nikkei share average experienced an upswing on Tuesday, bolstered by bargain-hunting and favourable momentum from the technology-centric South Korean market. The benchmark Nikkei 225 increased by 0.74% to finish at 67,743.50, recovering from a prior decline of up to 1.45%. The broader Topix increased by 0.79% to 4,038.98. Shares experienced a general decline in the morning, influenced by a downturn in the U.S. market overnight, which was prompted by renewed hostilities between the U.S. and Iran that led to a significant increase in oil prices.

The Nikkei turned higher in the afternoon, reflecting a recovery in South Korea’s Kospi, as the correlation between the markets has strengthened recently. “We are seeing some buying on the dip,” said Maki Sawada. Central bank policy remained a focal point following the warning from Reserve Bank of New Zealand Chief Economist Paul Conway, who indicated that elevated oil prices could contribute to a more persistent inflationary environment, thereby strengthening indications of additional tightening measures across major economies.

Mitsubishi UFJ Financial Group, Japan’s largest banking group, advanced 1.67% to an all-time high, making it the biggest company in the domestic market in terms of market value. “As interest rates rise, there are expectations that bank net interest margins will improve to some extent, leading to gains in the ⁠banking sector,” Nomura’s Sawada said. Market breadth exhibited a notably positive trend, with 176 advancers on the Nikkei contrasted against 47 decliners and two remaining unchanged.

The largest gainers included Shiseido, which saw an increase of 5.11%, followed by Kawasaki Kisen Kaisha with a rise of 4.73%, and Tokuyama, which experienced a gain of 4.17%. The most significant declines were observed in Yaskawa Electric, which fell by 8.98%, followed by Panasonic Holdings, down 5.57%, and Toppan Holdings, which experienced a decrease of 4.64%.