The Nikkei 225 index surged by 184 points to reach 36,636.55, driven by optimism surrounding ongoing US-China trade discussions.

This optimism is further bolstered by negotiations taking place in Switzerland, which are perceived as a means to alleviate global trade tensions.

Japanese automakers, including Toyota, Honda, and Nissan, experienced stock price increases of 2 to 3 percent, reflecting positive market sentiment.

Investors are closely watching Beijing's response to a US proposal for tariff talks, amid concerns regarding US 'pressure tactics'.

The upcoming earnings report from Toyota will shed light on how manufacturers are managing tariffs and the implications of future trade agreements.

Despite a 10% tariff affecting the limited US-UK trade deal, companies like Toyota are successfully navigating these challenges, contributing to overall market resilience.

Toyota is anticipated to report a rise in Q4 operating profit, attributed to strong sales, despite concerns regarding the impact of tariffs on annual earnings.

However, preliminary data from Japan's Cabinet Office indicated a decline in the leading index, which forecasts future economic activity, falling to 107.7 in March from 108.2 in February, marking the lowest level in four months.

Japan's finance minister emphasized that the country's substantial holdings of over $1 trillion in US treasuries would not be used as leverage, countering previous speculation.

The Topix Index also rose by 1.46% to 2,738, marking an 11-day rally, the longest since 2017, indicating sustained investor confidence.

Conversely, Daikin Industries faced a 5.03% drop, highlighting potential market risks amidst the overall positive trends.

In addition to automakers, NTT Data's shares surged by 14% following privatization plans, while Ajinomoto saw a 6.24% increase due to a stock buyback, showcasing strong momentum in Japanese stocks.