Japanese stocks closed higher on Tuesday, tracking gains in precious metals and a renewed rally in AI-related shares.

The Nikkei 225 rose 3.9%, or 2,065.48 points, to close at 54,720.66.

Risk appetite improved Tuesday as investors rotated back into semiconductors and AI-linked stocks after Palantir forecast fiscal 2026 revenue well above expectations and SpaceX confirmed a $1.25 trillion merger with xAI.

Equities also gained support as volatility eased in gold and other precious metals following two sessions of sharp declines. Spot gold jumped as much as 4.2% to above $4,855 an ounce before trimming gains.

On the corporate front, Nissin Foods Holdings (TYO:2897), which jumped 5%, posted China segment income of 1.78 billion yen for the quarter ended Dec. 31, reversing a 930 million yen loss a year earlier, while sales were flat at 18.7 billion yen, according to Nissin Foods Company's (HKG:1475) Hong Kong filing.

Credit Saison (TYO:8253), which ended 5% higher, plans to start an online banking business in Brazil after its local unit applied for an SCFI nonbank license. Approval could come as early as this year, with loans, credit cards and fixed-term deposits planned.

Meanwhile, Yomeishu Seizo (TYO:2540) rose nearly 2%, as it plans to go private with backing from top shareholder Yuzawa after talks with KKR collapsed. Yuzawa, which owns over 30%, is expected to delist the company via a tender offer and later sell operating businesses.