(Updates with closing prices)

By Junko Fujita

TOKYO, April 1 (Reuters) - Japan's Nikkei share average

rose 5% on Wednesday, supported by hopes of de-escalation in the

Middle East conflict after U.S. President Donald Trump said the

war with Iran could end in two to three weeks.

The Nikkei climbed 5.24% to 53,739.68, starting

April on a strong note, after logging its worst month since the

2008 global financial crisis in March. The broader Topix

gained 4.95% to 3,670.9.

"There are still uncertainties over the fate of the war, but

at least the market is confident that it is moving towards the

end," said Shoichi Arisawa, general manager of the investment

research department at IwaiCosmo Securities.

"If oil prices stabilise, it would make it easier for local

firms to make forecasts for this fiscal year. They are set to

start disclosing their outlook from the end of this month."

Trump and Secretary of State Marco Rubio said the Iran war

could be nearing an end, signalling that Washington was open to

direct talks with Tehran's leadership and could wind down the

conflict even without a deal.

In Japan, chip and artificial intelligence-related shares

led the rise, with Advantest ( ADTTF ) and SoftBank Group

jumping 10.67% and 5.88%, respectively. Tokyo Electron ( TOELF )

rose 5.51%.

Memory chip maker Kioxia ( KXHCF ) soared 14.26% to be the

top percentage gainer on Nikkei following its addition to the

index in a regular reshuffle.

Of Nikkei's 225 components, 221 rose.

All the Tokyo Stock Exchange's 33 industry sub-indexes

advanced.

The banking sector jumped 8.21%. Mitsubishi UFJ

Financial Group ( MUFG ) and Sumitomo Mitsui Financial Group ( SMFG )

rose 8% and 8.97%, respectively, leading the Topix

higher.

Meanwhile, KDDI ( KDDIF ) fell 3.32% after the phone company

said it had set up an investigation committee over inappropriate

transactions by employees at its subsidiary BIGLOBE.

(Reporting by Junko Fujita; Editing by Sumana Nandy, Rashmi

Aich and Subhranshu Sahu)