TOKYO: Japan’s Nikkei share average rose nearly 2% on Tuesday, led by defence stocks as former defence minister Shigeru Ishiba was confirmed as the country’s next prime minister by parliament.

The Nikkei rose 1.93% to close at 38,651.97, after falling nearly 5% in the previous session. The broader Topix jumped 1.69% to 2,690.78.

Heavy machinery makers were the top percentage gainers on the Nikkei, with Kawasaki Heavy Industries jumping 8.3%, while Mitsubishi Heavy Industries and IHI climbed 7.84% and 7.35%, respectively.

Ishiba was voted in by parliament as Japan’s next prime minister and is set to unveil his cabinet later in the day.

A close Ishiba ally, Takeshi Iwaya, a former defence chief, is slated to take over as foreign minister, while Gen Nakatani will return to the defence ministry.

“The market expected those defence-related stocks would benefit after seeing reports about key members of the new cabinet,” said Tomochika Kitaoka, chief equity strategist at Nomura Securities.

Exporters also rose on the back of a weaker yen. The dollar strengthened after Federal Reserve Chair Jerome Powell pushed back overnight against bets on more supersized interest rate cuts.

Toyota Motor climbed 2.1% and Honda Motor gained 2.29%.

A softer yen tends to help exporter shares as it increases the value of overseas profits in yen terms when firms repatriate them to Japan.

“The Nikkei returned to where it was a week ago and it will stay around this level for a while. But the Japanese equities are lagging behind their global peers, so they could rise further if there is a trigger,” said Kitaoka.

Chip-related heavyweights rose, with Tokyo Electron and Advantest gaining 2.97% and 2.21%, respectively.