Japan's Nikkei slides as Middle East stalemate fuels oil, inflation concerns
TOKYO: Japan's Nikkei share average fell on Tuesday, putting it on course to snap a five-day winning streak, as a stalemate in the Middle East conflict drove oil prices higher and renewed concerns about bond market risks and inflation.
Japan's Nikkei share average plummeted on Tuesday, edging closer to a break from a five-day winning streak, due to a Middle East stalemate sparking oil price surges and renewed worries about bond market risks and inflation. The Nikkei declined 1.1 percent to 68,460.56 by late morning, following a 5.5 percent gain over the previous five trading sessions. The broader Topix fell 0.2 percent to 4,177.50.
The cease-fire between the US and Iran came to an end this week, with Washington ruling out extending a ceasefire and Tehran declaring it would revert to a fully offensive military stance. As a result, crude oil prices climbed as traffic through the vital Strait of Hormuz shipping lane once again came to a standstill, and worries about global inflation pushed bond yields higher, including in Japan.
Equities strategist Wataru Akiyama of Nomura Securities explained that rising interest rates often highlight the relative overvaluation of share prices. Long-standing concerns about persistently high inflation, which exist in both Japan and the US, might act as a drag on the stock market in the future. Meanwhile, shipping stocks profited from expectations of higher freight rates, with marine transport emerging as the top performer among the 33 industry groupings on the Tokyo Stock Exchange, rising 4.1 percent.
AI stocks were a mixed bag, with SoftBank Group surging 2.7 percent, while Tokyo Electron plunged 4.3 percent.
Written by urgent.news from New Straits Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
