Japanese Shares Drop for Third Session

The Nikkei 225 Index fell nearly 4% toward 54,000 while the broader Topix Index dropped 3.8% to 3,630 on Wednesday, with Japanese shares sliding for the third straight session as higher oil prices caused by the Middle East conflict fanned inflationary concerns. Local stocks also tracked losses on Wall Street overnight as the US-Israeli war on Iran has now entered its fifth day, with Israel hitting a building where clerics were meeting to elect a new Supreme Leader on Tuesday. However, markets somewhat stabilized after President Donald Trump pledged to escort oil tankers through the Strait of Hormuz. Financial stocks led the decline, with steep losses at Mitsubishi UFJ (-3.3%), Sumitomo Mitsui (-4.6%), and Mizuho Financial (-2.6%), while tech shares extended declines, including Fujikura (-3.5%), Advantest (-1.6%), and Tokyo Electron (-2.1%).

The Nikkei 225 Index decreased -1685 points or 2.90 percent on Tuesday to close at 56372 points. The decline was led by Sumitomo Dainippon (-19.29%), TDK (-9.74%) and Pacific Metals (-8.91%).

The Nikkei 225 fell 3.06% to close at 56,279, while the broader Topix declined 3.24% to 3,772 on Tuesday, extending the previous session’s losses as escalating tensions in the Middle East drove oil prices higher and intensified global inflation concerns. Japan faces the risk of sluggish growth alongside persistent price pressures, a mix that complicates the policy outlook for the Bank of Japan, even as Deputy Governor Ryozo Himino signaled that the central bank intends to continue raising interest rates. Investors also tracked further developments in the region amid expectations that the US military would intensify strikes against Iran, targeting its missile production facilities, drone programs and naval assets. Nearly all sectors participated in the decline, with sharp losses recorded in index heavyweights such as Fujikura (-3.8%), Toyota Motor (-6.1%), Mitsubishi Heavy Industries (-5.3%), Sony Group (-6.3%) and Hitachi (-5%).