Sentiment remained cautious after hopes of a second round of US'Iran peace talks faded, adding to concerns around Middle East tensions. The US also continued its blockade on Iranian vessels, even as President Donald Trump extended a temporary ceasefire with Tehran, keeping geopolitical risks elevated.

On the domestic front, Japan's trade data showed exports rising for the seventh straight month, supported by steady demand from China and ASEAN countries. However, the trade surplus of 667 billion yen came in below expectations of 1.1 trillion yen, slightly disappointing investors.

Market participants are now focused on the upcoming Bank of Japan policy meeting, where rates are widely expected to remain unchanged, keeping monetary policy direction in focus.

Stock performance was mixed. Gains in Kioxia Holdings, SoftBank Group, and Advantest supported the market, driven by strength in technology and investment-linked names. However, losses in Mitsubishi UFJ, Fast Retailing, and Unitika reflected weakness in financials, retail, and select industrial stocks. Overall, the market showed a split trend as global uncertainty balanced out domestic economic signals.