The broader Topix , opens new tab also scaled a record peak, gaining 0.58% to 3,125.6. Investors settlement improved this month, driven by renewed optimism regarding the domestic corporate outlook as an effects of US tariffs becomes clearer.

“Domestic equities kept the momentum from last week. There was an expectation that foreign investors would continue buying Japanese stocks,” said Seiichi Suzuki, chief equity market analyst at Tokai Tokyo Intelligence Laboratory.

Fast Retailing gained 1.2% to lend the biggest boost to the Nikkei. Automakers rose, with Toyota Motor and Honda Motor rising 1.58% and 1.22%, respectively, as the yen lost 0.2% against the US dollar on Monday.

A weaker Japanese currency tends to boost exporters’ shares as it increases the value of overseas profits in yen terms when repatriated to Japan.

Additionally, Japanese market received a boost from the Dow Jones hitting an intraday record high on Friday, driven by a surge of United Health’s shares following Bershire Hathaway’s increased investments.

However, banking sector faced declines, with the banking index dropping 1.45%, marking it the biggest loser among Toyko Stock Exchange industry in sub-indexes.

Mitsubishi UFJ Financial group fell 1.96% while Sumitomo Mitsui Financial Group lost 1.78%. Banks had seen gains on Friday due to unexpected strong economic data raising expectations for the interest rate hike from the Bank of Japan.

Chip-related stocks also weighed on the Nikkei, with Tokyo Electron declining by 1.3% and others seeing slight losses.