Tokyo stocks hit record: Nikkei tops 71,000 and Topix at all-time high on US-Iran deal

Tokyo’s stock market was already rallying at the Asian open, but moved sharply higher after the announcement of the US-Iran memorandum of understanding. The Nikkei 225 tested above 71,000 during the session, while the Topix logged an all-time high. Investor risk appetite firmed as the global risk premium tied to the Strait of Hormuz eased after months of volatility.

Falling oil prices led the gains: Brent crude traded around two per cent lower after the deal, a relief for energy-dependent Japanese industrials. Auto and machinery makers were among the strongest performers, with Toyota and Mitsubishi Electric closing higher and contributing meaningfully to the index weighting.

Market strategists offered a measured reading of the rally. Mizuho Securities said that "with the inspection details of the deal still unknown, another wave of volatility could come in the autumn." Investors will closely watch the minutes of the Bank of Japan meeting due tomorrow; the yen showed only a limited reaction immediately after the policy news.