TOKYO: Tokyo stocks closed higher on Monday, rebounding from sharp losses last week as fears over the Middle East situation ebbed.

The benchmark Nikkei 225 index rose 1.00 percent, or 370.26 points, to 37,438.61, while the broader Topix index added 1.38 percent, or 36.14 points, to 2,662.46.

Unease over developments in the Middle East and shifting expectations on US monetary policy gave traders a rough week, compounded by the prospect of the Federal Reserve delaying interest rate cuts.

But while the geopolitical situation remains tense, a lack of escalation over the weekend encouraged the view that “Israel’s attacks would be limited while Iran would exercise restraint — leading to purchases of a wide range of shares”, IwaiCosmo Securities said.

This week will also bring a series of key indicators and events that may move the market.

Investors will get the latest read on US inflation, gross domestic product figures, jobless claims and housing. The Bank of Japan will also update its inflation projections. The dollar fetched 154.70 yen in Asia, against 154.64 yen in New York on Friday.

Nissan slipped 1.96 percent to 550 yen after the automaker on Friday lowered its earnings forecasts, citing lower sales volumes and higher costs paid to suppliers and other factors. Its rival Toyota declined 0.14 percent to 3,517 yen.

Heavily weighted Fast Retailing, which operates the Uniqlo clothing brand, added 2.30 percent to 41,450 yen.