Japan’s Nikkei share average concluded Monday’s session on an upward trajectory, buoyed by a decline in oil prices following a cessation of U.S. military actions against Iran. Meanwhile, investors maintained a cautious stance ahead of significant earnings reports scheduled for release this week. The benchmark Nikkei experienced an increase of 0.5%, concluding the session at 64,931.19, following a period of oscillation between positive and negative territory. The broader Topix rose 1.37% to 4,066.07. The U.S. has put a stop to its bombing campaign on Iran following almost two weeks of intense airstrikes. In response, a senior Iranian official informed that Tehran would likewise cease its attacks, contingent upon Washington’s adherence to the same course of action.

Oil prices experienced a decline exceeding 6% on Monday, driven by anticipations of a diplomatic resolution. “Reduced concern over higher crude prices should support Japanese shares overall, while buybacks ⁠are also expected ‌in stocks that had seen an increasingly corrective tone through last week,” stated Takayuki Miyajima. “However, with ⁠major U.S. cloud companies due to report earnings this week, investors may be reluctant to aggressively chase the upside as they assess capital spending plans and the monetisation of AI investment,” he said. Investors are concentrating on a packed week of earnings reports in the U.S. and Japan, alongside central bank policy decisions.

In Tokyo, chip-testing equipment manufacturer Advantest is set to announce its earnings on Wednesday, whereas memory chip producer Kioxia is expected to report on Friday. Market breadth exhibited a favourable trend, with 194 stocks advancing on the Nikkei 225 compared to 31 that declined. Software testing and quality assurance services provider Shift experienced the highest percentage increase on the index, climbing 9.32%. This was followed by consulting services provider BayCurrent, which saw an increase of 8.95%, and Shiseido, a global cosmetics and skincare company, which rose by 7.62%.

Shares of Shin-Etsu Chemical declined by 8.3%, positioning the silicon and chemical products manufacturer as the largest percentage loser on the Nikkei, following a full-year consolidated net profit outlook that fell short of market expectations. It marked the most significant percentage decline for the stock since January. Optical fibre producer Fujikura experienced a decline of 5.83%, while SoftBank Group, a prominent tech investment conglomerate, saw a reduction of 3.07%.