TOKYO, March 25 (Reuters) - Japan's Nikkei share average

climbed roughly 3% on Wednesday, supported by cautious optimism

that the Middle East crisis could move toward a potential

settlement after recent volatility.

The benchmark Nikkei 225 Index advanced 2.93% to

53,784.43. The broader Topix climbed 2.5% to 3,648.78.

U.S. President Donald Trump said on Tuesday the U.S. was

making progress in its efforts to negotiate an end to war with

Iran. Like many global markets, Japanese stocks have gyrated on

conflicting signs of escalation of the crisis or an off-ramp to

hostilities.

Because of its dependence on imported energy, Japan's

economy is particularly vulnerable to the conflict's impact on

oil shipments and prices. The sharp decline in crude on

Wednesday appeared to be the trigger for a jump in the Nikkei,

said Wataru Akiyama, a strategist at Nomura Securities.

"Expectations for a lowering of tensions in the Middle East

appear to be driving the stock market higher," Akiyama said.

"However, the sense of uncertainty has not yet been completely

eliminated."

Japan's Nikkei 225 saw broad-based gains, with 211 stocks

advancing compared with just 14 decliners.

Leading the rally was Tokio Marine Holdings ( TKOMF ), which

surged 9.8% and climbed for a second consecutive session after

Berkshire Hathaway ( BRK/A ) disclosed it had acquired a stake in

the insurer.

It was followed by strong performances from Furukawa

Electric ( FUWAF ), which rose 8.7%, and SoftBank Group,

up 8%. Both companies benefited from continued momentum in

artificial intelligence-related investments.

On the downside, Inpex Corporation ( IPXHF ) slipped 2.6%,

making it the biggest laggard of the session, followed by Nomura

Research Institute ( NURAF ), which declined 2.2%.