TOKYO: Japanese shares settled higher on Tuesday, as a strong finish on the Nasdaq overnight boosted heavyweight local technology stocks, although worries about a sluggish economic recovery because of a slow vaccine rollout capped gains.

The Nikkei share average rose 0.67% to close at 28,553.98, while the broader Topix inched up 0.34% to 1,919.52.

"High-priced stocks have lifted the Japanese market after a strong gain in major US indexes," said Norihiro Fujito, chief investment strategist, Mitsubishi UFJ Morgan Stanley Securities.

"But, fundamentally, the market is weighed down on concerns over Japan's slow response to the pandemic, which has caused a big gap between the economic sentiment in Japan against the US and Europe. The pace of Japan's vaccine rollouts is still incomparable with these countries."

Wall Street's three main indexes gained overnight, with the Nasdaq Composite jumping more than 1% after US Treasury yields retreated. Chip-related shares advanced, with Tokyo Electron jumping 1.76% and Advantest rising 2.35%.

Other index heavyweights Fast Retailing gained 0.93% and SoftBank Group advanced 0.54%.

The prolonged pandemic continues to drag sentiment, with local media reports saying that Japan was leaning towards extending the emergency measures beyond May 31, while the US State Department on Monday urged against travel to Japan.

Retailers declined, with J.Front Retailing losing 1.88%, Takashimaya falling 1.45% and Isetan Mitsukoshi Holdings slipping 2.05%.

Airliners also fell, with ANA Holdings and Japan Airlines losing 0.80% each.

The largest percentage gainer on the Nikkei was Konami Holdings, up 4.29%, followed by Kobe Steel, gaining 3.85%, and Japan Steel Works, up 3.63%.

T&D Holdings Inc, down 3.1%, was the largest percentage loser on the index, followed by NH Foods, losing 2.96%, and Tosoh Corp, down by 2.77%.