FX.co ★ Japanese Shares Climb Toward Record Highs

The Nikkei 225 Index climbed 1% to above 58,400 on Wednesday, while the broader Topix Index advanced 0.8% to 3,785. The Nikkei moved closer to the record highs reached before the onset of the Middle East conflict, supported by hopes for a diplomatic resolution to the war. The US and Iran are reportedly preparing for a second round of peace talks in the coming days, even as tensions in the Strait of Hormuz exacerbate the global energy crisis.

Oil prices nonetheless fell sharply, easing market concerns over inflation and the prospect of further monetary tightening by major central banks. At the same time, the Bank of Japan is said to be considering an upward revision to its inflation forecast at this month’s policy meeting to account for higher energy costs, although it is still widely expected to leave interest rates unchanged.

Technology shares led the advance, with Lasertec up 3.7%, Advantest gaining 4.7%, and SoftBank Group rising 5.5%. Major banks also strengthened, including Mitsubishi UFJ (+1.5%), Sumitomo Mitsui (+2.4%), and Mizuho Financial (+3.7%).