(Bloomberg) -- The Nikkei 225 Stock Average hit an all-time high on Tuesday as relief over US tariffs continued to fan optimism over the nation’s economic outlook, while tech shares led the rally.

The blue-chip gauge climbed as much as 2.8% before closing 2.2% higher at 42,718.17, joining the Topix in surpassing July 2024 peaks. Chip-related names jumped after Micron Technology Inc. raised its sales outlook, while memory maker Kioxia Holdings Corp. posted strong results.

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Japanese equity markets, which resumed trade after Monday’s holiday closing, also gained on speculation the government will expand fiscal stimulus after the ruling party’s poor upper house election result last month.

The benchmark posted a five-day gain after Japan’s top trade negotiator confirmed on Friday that US officials said Washington would end stacking of universal tariffs on the country and cut car levies as promised. President Donald Trump extended a pause of sky-high tariffs on Chinese goods for another 90 days.

“Japan avoided the worst case scenario,” said Toshiya Matsunami, chief analyst at Nissay Asset Management. “Of course the tariff is not positive in the longer term but at least in the short term, it was better than feared.”

“Japan is a bit more of a known entity now on the tariff front,” said Tim Waterer, chief market analyst at KCM Trade. A deal with the US “offers some certainty for investors,” he said.

The Nikkei, which has a heavy concentration of exporters including automakers and technology companies, has trailed the broader Topix this year as concerns around tariffs prompted investors to favor more domestic-driven stocks.

Benchmarks maintained most of their gains despite news that China has urged local companies to avoid using Nvidia Corp.’s H20 processors.

A surge in trading volume also attested to the market’s strength. Monday’s turnover hit 6.86 trillion yen, the highest in almost three weeks even as Japan entered the “Obon” holiday period.

--With assistance from Brett Miller, Momoka Yokoyama and Toshiro Hasegawa.

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