Japan's Nikkei rose more than two percent on Monday, driven by chip-related stocks that mirrored gains in U.S. peers. The Nikkei average climbed 2.28% to 66,500.29, while the broader Topix rose 0.81% to 4,136.31. Market optimism was fueled by U.S. Treasury Secretary Scott Bessent's comments suggesting bond yields may stabilize and the yen could firm, easing volatility.

Chip-testing equipment maker Advantest and chip-making equipment maker Tokyo Electron each gained over 4%, and memory maker Kioxia jumped 6.8%. Kokusai Electric surged 8% after being added to the Nikkei 225 benchmark from October. In contrast, Sony Group fell 2%, and gaming stocks like Konami Group and Bandai Namco Holdings declined nearly 2% each.

Bank shares also slipped, with Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group losing more than 1% each. Overall, 48% of the 1,500+ stocks on the Tokyo Stock Exchange's prime market rose, 48% fell, and 3% traded flat.