Japan's Nikkei snaps losing streak as tariff jitters ease

(Updates for market close)

By Brigid Riley

TOKYO, March 25 (Reuters) - Japan's Nikkei share average snapped a three-day losing streak on Tuesday, as indications that impending U.S. tariffs may be more measured than previously feared injected fresh optimism into the markets, though ongoing uncertainty capped the gains.

The Nikkei closed 0.5% higher at 37,780.54. Earlier in the session, the index climbed more than 1% and briefly reclaimed the crucial 38,000-point level.

The broader Topix touched an eight-month peak of 2,818.36, and finished 0.2% higher at 2,797.52.

Japanese equities took their cues 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.

While the broad gains across U.S. stock indexes reassured investors, it remained uncertain how long the optimism will last, according to Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management.

"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.

Gains by heavyweight chip-related shares narrowed during afternoon trading, taking some of the momentum out of the Nikkei's rebound. SoftBank Group edged 0.4% higher and Tokyo Electron ( TOELF ) added 0.5%.

Shares of Advantest ( ADTTF ), which counts AI darling Nvidia ( NVDA ) among its customers, extended losses to end 3.4% lower.

Toyota Motor ( TM ), up 0.7%, was among Japanese carmakers to get a boost from hopes that U.S. tariffs on auto imports might not be as severe as anticipated.

Exporter-related shares also received support from a weaker yen, with the dollar last trading at 150.55 yen after the Japanese currency depreciated overnight.

Among other major stocks, Uniqlo parent company Fast Retailing ( FRCOF ) gained 0.6%, providing the largest boost to the Nikkei.

Electronic components maker TDK Corp ( TTDKF ) gained 1.8%, and medical equipment maker Terumo ( TRUMF ) climbed 2.5%.

Game manufacturer Nexon ( NEXOF ) rallied 9% to top the rank of percentage gainers.

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