TOKYO: Japan’s Nikkei share average tracked Wall Street higher on Tuesday, shaking off the weight of the yen’s recent gains, after an encouraging US economic outlook continued to support risk appetite globally.

The Nikkei was up 1.7% at 38,015.87 by the midday break, recouping from previous session’s losses after yen appreciation dragged on Japanese equities.

The broader Topix was up 1% at 2,668.52.

US stocks climbed on Monday, building on their largest weekly percentage gain of the year, as equities continued to rebound from a steep sell-off seen two weeks ago.

“The theme these days were concerns over a recession in the United States are lessening,” said Hiroshi Namioka, chief strategist and fund manager at T&D Asset Management.

“The fact that US stocks are performing solidly now is having a relatively positive effect on Japanese shares.”

Recent US data revived expectations of a soft landing for the world’s largest economy, and market players now await Federal Reserve Chair Jerome Powell’s remarks on Friday at the Jackson Hole Economic Symposium for hints on the Fed’s rate path.

Japanese technology stocks tracked their US peers higher to help lift the overall benchmark index, with big names such as AI-focused startup investor SoftBank Group and chip-making equipment giant Tokyo Electron trading in green.

Gains were widespread, with 198 of the Nikkei’s 225 constituents rising against 26 decliners.

Japan’s Nikkei trades lower after five straight sessions of gains

A pause in the yen’s climb on Tuesday reassured investors, although analysts said the stock market remains sensitive to moves in foreign exchange.

The Japanese currency was last hovering around 146.64 yen per dollar.

Among individual shares, Uniqlo parent firm and Nikkei heavyweight Fast Retailing was up 2.7% to give the index the biggest lift.

Shares of Seven & I Holdings slumped 8% to shed Monday’s gains made on news of a takeover proposal from Canada’s Alimentation Couche-Tard.