Japan's Nikkei bounces as US tariff fears ease, yen softens

(Updates for the midday break)

By Brigid Riley

TOKYO, March 25 (Reuters) - Japan's Nikkei share average climbed more than 1% on Tuesday as indications that impending U.S. tariffs against trading partners may be more measured and targeted than previously feared injected fresh optimism into markets.

Automakers and other export-related stocks received an additional boost from a weaker yen.

The Nikkei was up 0.7% at 37,881.70, as of the midday break, putting the index on track to snap a three-day losing streak.

The broader Topix touched an eight-month peak of 2,818.36, and was trading 0.3% higher at 2,799.92.

Japanese equities took their cue from all three major U.S. stock indexes finishing sharply higher on Monday after investors took the latest comments from U.S. President Donald Trump as a sign of flexibility on the tariff blitz that has rocked markets.

The broad gains across U.S. stock indexes reassured investors, and tariff concerns eased somewhat, according to Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management.

However, it remains uncertain how long this optimism will last.

"There are still many unknowns, like what specific tariffs will be announced on April 2, and we won't know until next week," said Ichikawa.

Japan's technology shares outperformed after their U.S. peers rebounded overnight, with the Philadelphia SE Semiconductor Index logging a 3% rise. SoftBank Group climbed 1.2% and Tokyo Electron ( TOELF ) added 1.7%.

Toyota Motor ( TM ), up 0.8%, along with other carmakers, gained on the expectation that U.S. tariffs on auto imports might not be as severe as previously anticipated, while also benefiting from a weaker yen.

The dollar last traded at 150.63 yen after the Japanese currency depreciated overnight.

Among major shares, Uniqlo parent firm Fast Retailing ( FRCOF ) rose 1.1%, contributing the most to the Nikkei.

Electronic components maker TDK Corp ( TTDKF ) and medical equipment maker Terumo ( TRUMF ) both rallied more than 2%. Chip-testing equipment maker Advantest ( ADTTF ) slipped 0.8%.

(Reporting by Brigid Riley; Editing by Tom Hogue and Sherry Jacob-Phillips)