Japanese shares rebounded sharply after a phone call between Prime Minister Shigeru Ishiba and US President Donald Trump boosted hopes of a tariff breakthrough.
The Topix jumped as much as 7.2% to 2,452.78 and the Nikkei 225 surged 6.8% to 33,257.16 in Tokyo morning trading — the biggest intraday gains since August.
Investors are optimistic that Japan may strike a deal to avoid a looming 24% tariff, just before the Wednesday deadline. Both indexes had lost over 7% since the tariffs were announced on April 2.
Exporters led the rally, helped by a weaker yen. Hitachi rose 15%, while bank stocks also soared. The Topix banking subindex climbed more than 11%, with Mitsubishi UFJ gaining 13%.
The 10-year bond yield rose to 1.215% as risk sentiment improved.