Japanese shares extended their opening gains to close the week on a positive note in Friday's session, driven by optimism in the global markets of a possible resolution for the U.S.-Iran war.

The Nikkei 225 closed up 1,640.07 points or 2.7% at 63,324.21.

Media reports quoted US Secretary of State Marco Rubio saying that there had been "some good signs" in the Iran-US negotiations. However, differences over Iran's uranium stockpile and control of the Strait of Hormuz are still under dispute.

Iran is currently in discussions with Oman on ways of setting up a permanent toll system that will formalize its control of maritime traffic through the Strait of Hormuz. On the other hand, while President Donald Trump insists the strait must remain open and toll-free.

On the domestic front, Japan's core consumer prices eased in April, registering a year-on-year increase of 1.4%, compared with 1.8% in March despite higher prices for oil and gas due to the war, according to government data on Friday.

The slower pace of increase over the past year is attributed to moderating effects on energy costs as the government intervenes to ease the cost of living.

On the corporate side, Tokyo Electric Power Company (TYO:9501) received 7.2 billion yen in grants from the Nuclear Damage Compensation and Decommissioning Facilitation relating to Japan's ongoing Fukushima nuclear accident compensation program, according to a Friday filing with the Tokyo Exchange.

The electric utility's shares closed down nearly 2% on Friday.

Also, WELLNEO SUGAR (TYO:2117) has formally decided to execute an absorption-type merger with its wholly owned subsidiary, Toyo Sugar Refining, according to a Friday filing. The transaction is expected to take effect on Oct. 1, with WELLNEO SUGAR becoming the surviving entity.