The Nikkei stock index closed Monday at a fresh 33-year high as news that a U.S. debt ceiling deal has been reached boosted sentiment while a weakening yen lifted export-related issues.

The 225-issue Nikkei Stock Average climbed 317.23 points, or 1.03 percent, from Friday to 31,233.54, its highest finish since July 26, 1990, when Japan was experiencing an asset price bubble. The broader Topix index finished up 14.81 points, or 0.69 percent, at 2,160.65.

On the top-tier Prime Market, gainers were led by marine transportation, wholesale trade and bank issues.

The U.S. dollar retreated to the lower 140 yen level after climbing to a fresh six-month high of around 140.90 yen in Tokyo, as U.S. economic data showing stubbornly high inflation in April raised expectations of further interest rate hikes by the Federal Reserve, dealers said.

The Nikkei briefly rose more than 600 points, or over 2 percent, in the morning on receding fears of a U.S. technical default after U.S. President Joe Biden and House Speaker Kevin McCarthy reached a deal Sunday to raise the country's debt limit, analysts said.

But the benchmark index narrowed its gains in the afternoon, with a wait-and-see mood prevailing as U.S. markets are closed for Memorial Day on Monday, said Tomoichiro Kubota, senior market analyst at Matsui Securities Co.

Following the strong start this week, "there is likely to be little movement in the Nikkei" until U.S. markets reopen Tuesday, said Kubota.

The upward momentum was also supported by gains late last week on Wall Street, with all three major indexes closing up on optimism about a debt ceiling deal and rallies in tech stocks following upbeat earnings reports last week from semiconductor-related firms like Nvidia Corp. and Marvell Technology Inc.

Nikkei index heavyweight SoftBank Group soared 420 yen, or 8.2 percent, to 5,542 yen after unit SoftBank Corp. announced Monday that it is collaborating with Nvidia to build a next-generation platform for generative artificial intelligence and 5G communications.

Fellow heavyweight and chip-testing equipment maker Advantest surged 690 yen, or 4.1 percent, to 17,670 yen.

Export-related stocks also continued to boost the market, as the yen's depreciation raises the prospect that companies' overseas profits will increase when repatriated.

Among technology-related exporters, electronic components maker TDK rose 50 yen, or 0.9 percent, to 5,360 yen, while Mitsubishi Electric climbed 33.5 yen, or 1.9 percent, to 1,832 yen.

A financial data screen in Tokyo shows the Nikkei Stock Average rising more than 600 yen at one point on May 29, 2023. (Kyodo)