Investor sentiment improved on hopes of a diplomatic solution, as the US and Iran are expected to hold another round of talks soon. At the same time, oil prices dropped sharply, helping ease worries about inflation and reducing pressure on central banks to raise interest rates.

The Bank of Japan is reportedly considering raising its inflation forecast due to higher energy costs, but is still likely to keep interest rates unchanged for now.

Among major stocks, SoftBank Group, Advantest, Mitsubishi UFJ, Hitachi, and Shin-Etsu Chemical posted strong gains.