The Nikkei 225 Index Closes 3.12% Higher

The Nikkei 225 Index dropped 2% to around 57,500 on Monday, giving back gains from last week as the escalating war in the Middle East fueled risk-off sentiment across financial markets. The US and Israel carried out military strikes on Iran over the weekend that resulted in the death of Iran’s Supreme Leader, Ayatollah Ali Khamenei, and the effective closure of the Strait of Hormuz. Tehran retaliated by targeting US assets across the region, raising concerns of a broader conflict. Japanese shares also mirrored losses on Wall Street from Friday as investors weighed whether rapid AI adoption could displace traditional software providers. Still, local equities had been among February’s top performers, with the Nikkei rising 10.4% last month amid global investor rotation into Asian companies positioned to benefit from expanding AI infrastructure. Sharp losses were seen from index heavyweights such as Mitsubishi UFJ (-5.8%), Advantest (-3.5%), SoftBank Group (-2.9%) and Nintendo (-4.4%).

The Nikkei 225 rose 0.16% to close at 58,850, while the broader Topix Index gained 1.5% to 3,939 on Friday, reversing earlier losses as advances in consumer and financial stocks offset weakness in the tech sector. Japanese equities also delivered solid performance in February, with investors rotating into companies poised to benefit from the expansion of AI infrastructure. The Nikkei 225 climbed 10.37% this month, while the Topix advanced 10.44%. In corporate developments, Nintendo rose 3% following reports that it plans to retire up to 1.2% of its outstanding shares, amounting to 100 billion yen. Sony Group also surged 7.2% after expanding its ongoing share buyback program to as much as 250 billion yen from 150 billion yen. Meanwhile, technology stocks underperformed despite robust earnings from Nvidia, highlighting lingering market sensitivity to AI-related risks. Notable declines were recorded by Fujikura (-2.6%), Advantest (-4.5%) and Disco Corporation (-4.5%).

The Nikkei 225 Index gained 124 points or 0.21 percent on Friday to close at 58877 points. Gains were led by Sumitomo Metal Mining (11.33%), Pacific Metals (10.80%) and Dowa (10.44%). Biggest losers were Advantest (-4.41%), Hoya (-3.46%) and Screen Holdings (-3.25%).