TOKYO, April 24 (Reuters) - Japanese shares hit a two-month closing high on Tuesday with financials leading gains after U.S. bond yields spiked to four-year highs and as investors remained optimistic about upcoming earnings.
The Nikkei advanced 0.86 percent to 22,278. From its six-month low hit in late March, it has gained 9.5 percent, and coming near major resistance of 100-day moving average, which came at 22,340.
The broader Topix ended 1.08 percent higher at 1,770. Both the Nikkei and the Topix hit their highest close since late February.
Large cap shares were particularly favoured, with Topix core 30 gaining 1.24 percent. Small cap shares rose 0.83 percent.
Banks rose 2.1 percent, with Mitsubishi UFJ climbing 2.5 percent and Sumitomo Mitsui Financial up 2.0 percent. Insurers gained 1.2 percent.
With Japanese financial institutions stepping up investment and lending in the United States in recent years as negative interest rates at home crushed domestic returns, higher U.S. borrowing costs are seen as improving their margins.
Exporters also benefited from a fall in the yen to 10-week lows, with Toyota Motor and Shin-Etsu Chemical up 2.0 percent.
Turnover at the Tokyo Stock Exchange's main board was near the average, at 2.43 trillion yen.
Real estate investment trusts were another bright spot, with the REIT index rising 0.4 percent to an 11-week closing high.
Reporting by Hideyuki Sano; Editing by Sam Holmes