FX.co ★ Japanese Shares Fall as US Strikes Iran

On Monday, the Nikkei 225 experienced a decline of 0.7%, falling below 38,200, while the broader Topix Index saw a dip of 0.8% to 2,750. This marks the third session in a row of losses for Japanese equities. This downturn was prompted by the recent US airstrikes on three Iranian nuclear facilities over the weekend, signifying a significant escalation in Middle Eastern tensions as the US joins Israel in its confrontation with Iran. Investors are now on high alert, anticipatedly awaiting Tehran's response due to concerns over potential widespread regional instability and a surge in oil prices. Domestically, there was a silver lining as data indicated a return to growth in Japanese manufacturing activity in June for the first time since May 2024, coupled with the services sector's expansion for a third straight month, pointing towards some resilience in the broader economy. Nonetheless, technology stocks led the market's downturn, with significant losses recorded by Advantest (-2.2%), Lasertec (-4.8%), Disco (-3.6%), SoftBank Group (-1.6%), and Tokyo Electron (-2.8%).