Japan's Nikkei 225 index rose 1.1% to close at 70,683.98 points, finishing above the 70,000 mark for the first time since July 1, even as uncertainty from the ongoing Iran conflict persisted.

Electronics and metals stocks led the gains, driven by expectations of rising artificial intelligence-related demand. Advantest climbed 3.8%, while Fujikura advanced 5.2%. The dollar traded at 158.21 yen.

Investors are keeping a close watch on developments in the Middle East and on crude oil prices. Bank of Japan Governor Kazuo Ueda reiterated the central bank's stance that it is important to keep core inflation stable at around 2%, and that the BOJ will continue raising interest rates in line with economic, inflation and financial conditions.

Speaking briefly at a financial conference, Ueda said Japan's economy is moving in line with the BOJ's expectations. He noted there is a risk that price trends could rise and overshoot the central bank's 2% target. He said the BOJ will determine the timing and pace of rate hikes by assessing the economic outlook and various risks.

The Ministry of Finance will raise the coupon rate on 10-year government bonds, which reflects the interest ratio paid to buyers, from 2.7% in the July-to-September period to 3.1% at an auction on the 6th, marking the highest level in about 30 years since the auction of August 21, 1996. The bonds will be issued on the 7th.