Nikkei Stock Average rose 0.4% to 63987.36, driven by gains in chip stocks. Kioxia Holdings surged 3.0%, while Lasertec gained 4.7%. The dollar rose to 157.40 yen from 156.63, reflecting market sensitivity to Middle East tensions after Iran denied U.S. dialogue. Investors also tracked quarterly earnings. Early trading mirrored U.S. tech share gains overnight.

Chip stocks dominated the rally, with semiconductor-related firms outperforming broader indices. The 0.4% gain marked a positive shift after recent volatility. Analysts noted strong overseas demand for Japanese tech components. The dollar-yen move suggests mixed global risk appetite.

Middle East developments remain a key focus. Iran’s rejection of talks with the U.S. could impact energy markets and investor confidence. Broader Asian markets followed suit, with regional indices edging up. Quarterly earnings reports from major Japanese firms are scheduled this week, adding to market watchlist items.

The rally highlights sensitivity to U.S. tech performance and geopolitical risks. While chip stocks led gains, broader market participation was limited. Analysts caution against overinterpreting short-term moves amid ongoing uncertainties in both financial and geopolitical realms.