Japanese Shares Slip on US-Iran Fighting

Asian equity markets declined on Friday, pulling back from record highs as renewed hostilities between the US and Iran in the Strait of Hormuz revived geopolitical risk concerns. Three US Navy destroyers transiting the strategic waterway reportedly intercepted Iranian attacks and carried out retaliatory strikes, although President Donald Trump said the ceasefire remains in place. Benchmark indexes across Australia, Japan, South Korea, China, and Hong Kong all traded lower amid the cautious sentiment. Despite the pullback, regional markets are still on track to end the week in positive territory, supported by sustained momentum from strong earnings among major technology firms, which continue to underpin confidence in artificial intelligence-driven growth.

The Nikkei 225 Index fell 0.4% to around 62,500, while the broader Topix Index dropped 0.6% to 3,817 on Friday, giving back part of the previous session’s gains as renewed fighting between the US and Iran in the Strait of Hormuz revived geopolitical concerns. In Japan, data showed real wages rose for a third consecutive month in March, reinforcing the Bank of Japan’s case for additional interest rate hikes even as the Middle East conflict adds uncertainty to the economic outlook. Among individual stocks, notable declines were recorded in SoftBank Group (-3.2%), Fujikura (-2.7%), Fast Retailing (-2.2%), Lasertec (-2.3%), and Ibiden Co (-8%). Despite Friday’s pullback, Japan’s benchmark indexes remain on track for strong weekly gains after Thursday’s sharp rally, as upbeat earnings from major technology firms strengthened optimism around artificial intelligence and lifted demand for semiconductor-related shares.

The Nikkei 225 Index surged 5.58% to close at 62,834 in post-holiday trading on Thursday, climbing to a new all-time high as Japanese equities caught up with the global technology-driven rally. Strong earnings from major tech companies reinforced optimism surrounding artificial intelligence and boosted appetite for semiconductor-related shares. SoftBank Group led gains, soaring more than 18% to a six-month high and marking its strongest daily performance since 2020. Chip-testing equipment maker Advantest and semiconductor equipment supplier Tokyo Electron also advanced sharply, rising 6.8% and 9%, respectively. Other major technology gainers included Fujikura, Lasertec, and Disco Corp. Market sentiment was further lifted by reports that the US and Iran are nearing a one-page, 14-point memorandum of understanding aimed at ending the conflict, with measures that could eventually reopen the Strait of Hormuz and establish a framework for broader nuclear negotiations.