The Japanese stock market's Nikkei index advanced on Tuesday as trading resumed following a holiday closure, with investors seeking to buy the dip after the benchmark experienced its steepest weekly decline in over a year.

The Nikkei 225 gained 3.26% to close at 66,232.19 points, recouping a portion of last week's 6.4% loss. The broader Topix index rose 2.44% to settle at 4,014.95 points.

While Japanese markets were closed on Monday, major U.S. stock indices saw modest declines, influenced by rising oil prices amid escalating tensions between the U.S. and Iran. On Tuesday, the Nikkei's gains accelerated during the afternoon session, partly driven by a positive move in South Korea's KOSPI index.

Market participants are now turning their attention to a slate of second-quarter corporate earnings reports from major AI industry leaders scheduled for later this week, including Alphabet Inc, Tesla Inc, and Intel Corp. According to LSEG forecasts, second-quarter profits for semiconductor and related companies within the S&P 500 are projected to surge by 133% year-over-year.

Nomura Securities equity strategist Wataru Akiyama commented, "Compared to the sharp sell-off seen in the latter half of last week, the current technical rebound does not yet appear to be showing very strong momentum."

"Upcoming earnings reports from Japanese and U.S. companies, particularly from large-cap firms, could alleviate some of the weakness in AI-related stocks," he added.

Among Nikkei 225 constituents, 187 stocks advanced, 37 declined, and one was unchanged. The index's top performer was chipmaker Kioxia Holdings Corp, which soared 17.18%. It was followed by electronic components manufacturer Ibiden Co Ltd, up 11.03%, and semiconductor design company Socionext Inc, which gained 9.11%.

The largest decliners were video game giant Nintendo Co Ltd, down 4.13%, followed by food manufacturer Kikkoman Corp, which fell 2.49%, and internet services company CyberAgent Inc, declining 2.36%.