The Nikkei index on the Tokyo Stock Exchange closed above 65,000 points for the first time, marking a new historic milestone. The rally came as markets reacted positively to signals of peace in the Middle East, reducing tensions and boosting capital flows into Asia.
At the close, the Nikkei gained more than 1.5%, surging past the psychologically key 65,000 level. Analysts said optimism about the prospect of a lasting ceasefire in the Middle East had buoyed investor sentiment globally, especially in Japan.
“This is a sign that investors are expecting a more stable period in the Middle East, which will help lower energy costs and unlock trade flows,” a Kyodo News analyst said. Energy and manufacturing stocks posted the strongest gains during the session on May 17, 2026.
Investors also welcomed news of fresh peace talks between regional stakeholders, easing concerns about disruptions to oil and gas supplies. That paved the way for strong capital inflows into emerging and developed Asian economies, lifting the Nikkei to an unprecedented record.
