Japan's Nikkei share average closed at a record high for a third straight session on Wednesday, ending just shy of the 70,000 mark, on easing concerns over the Middle East conflict and sustained buying in AI-related shares ahead of the U.S. Federal Reserve's policy decision.
The Nikkei rose 0.7% to close at 69,902.25 after touching an intraday high of 70,125.75. The broader Topix climbed 0.6% to 4,013.23.
Details of a U.S.-Iran interim deal to end the conflict are emerging, with President Donald Trump saying it would rule out a nuclear weapon for Tehran and a U.S. official saying it would allow Iran to sell oil once signed.
Oil prices eased, extending the previous session's declines as investors assessed the U.S.-Iran peace deal.
"As concerns over geopolitical risk continue to recede from yesterday, the market still seems to be seeing some buying driven by expectations for expanding AI demand, particularly in certain pockets of the market such as high-priced semiconductor shares and other AI-related stocks," said Maki Sawada, a strategist at Nomura Securities.
Market breadth remained strong, with 137 stocks advancing against 85 decliners in the Nikkei.
AI-related shares performed strongly overall, with chip inspection equipment maker Lasertec jumping 13.2% to close at a record high. Electronic components maker Murata Manufacturing rose 3.2%, while industrial robots maker Yaskawa Electric advanced 2.9%.
The biggest percentage decliners were life insurance group T&D Holdings, which fell 3.2%, followed by tech investment conglomerate SoftBank Group, down 3.1%, and medical endoscopes and optics company Olympus, which lost 3%.
The Nikkei briefly crossed the 70,000 mark for the first time on Tuesday after the Bank of Japan raised interest rates to 1.00%, as widely expected.
Investors will closely watch new Fed Chair Kevin Warsh's comments on inflation, unemployment and the economic outlook at his first post-Federal Open Market Committee press conference later in the day.
The Fed is widely expected to keep interest rates steady.
