Japanese Shares Sink to 3-Week Lows

The Nikkei 225 Index fell 2.1% to below 63,000, while the broader Topix Index lost 1.4% to 3,793 on Thursday, with both benchmarks touching three-week lows after the US launched fresh strikes against Iran, driving oil prices higher. Technology stocks also remained under pressure amid persistent concerns over elevated AI-related valuations, weighing heavily on Japanese companies with significant exposure to the global AI expansion. At home, the Bank of Japan is widely expected to raise interest rates next week as policymakers contend with soaring energy costs linked to the Middle East conflict. Tech and AI-related shares led the losses, with Tokyo Electron (-1.3%), Taiyo Yuden (-3.4%), SoftBank Group (-4.6%), Fujikura (-4.8%), and Advantest (-3.3%) posting notable declines. Financial and consumer stocks also weakened, adding to the broader market downturn.

The Nikkei 225 Index fell 1273 points or 1.95 percent on Wednesday to close at 64144 points. Leading the losses are Taiyo Yuden (-11.79%), Furukawa Electric (-11.46%) and Sumitomo Electric (-11.09%).

The Nikkei 225 Index dropped 1.89% to close at 64,179, while the broader Topix Index fell 1.25% to 3,848 on Wednesday, giving back the previous session’s gains as investor sentiment deteriorated after the US launched “self-defense strikes” against Iran in response to the downing of an American helicopter. Japanese equities also followed a technology-led selloff on Wall Street, where semiconductor stocks came under renewed pressure. Meanwhile, domestic data showed Japan’s wholesale inflation accelerated to 6.3% year-on-year in May, the fastest pace in more than three years, driven by surging energy costs. The data reinforced expectations that the Bank of Japan will raise interest rates next week. Chip and AI-related companies led the market lower, with sharp declines from Kioxia Holdings (-7.8%), Taiyo Yuden (-12.9%), SoftBank Group (-8.3%), Murata Manufacturing (-10.8%), and Fujikura (-6.8%).