Japanese stocks hold slight gains as geopolitical tensions limit upside

Japanese markets ended Tuesday with modest gains, though much of the earlier rally faded. The Nikkei 225 edged up 0.03% to 53,430, while the TOPIX rose 0.25% to 3,654.

Investor sentiment remained cautious due to rising tensions in the Middle East. Donald Trump set a deadline for Iran to reach an agreement and reopen the Strait of Hormuz or face stronger military action. Iran pushed back, rejecting a US-backed ceasefire and calling for an end to hostilities, removal of sanctions, and support for rebuilding the region.

In Japan, Sanae Takaichi said she plans to speak with Iran?s leadership and also hold talks with Trump, as efforts continue to ease tensions.

On the market side, technology and financial stocks led gains, with advances seen in Kioxia Holdings, Advantest, Ibiden Co, Mitsubishi UFJ Financial Group, and Sumitomo Mitsui Financial Group.