FX.co ★ Japanese Shares Drop on Mideast Tensions

The Nikkei 225 fell by 1.02%, closing at 38,488 on Thursday, while the broader Topix Index saw a 0.58% decline to finish at 2,792, ending a three-day upward trend. Investor sentiment was affected by increasing geopolitical tensions, particularly with reports suggesting that the United States may be planning a potential strike on Iran, raising concerns about increased instability in the Middle East. This downturn followed the US Federal Reserve's decision to keep interest rates unchanged, maintaining a cautious outlook due to inflation risks related to tariffs imposed by President Donald Trump. Domestically, attention has now turned to forthcoming inflation data, which could influence the Bank of Japan's policy direction. The BOJ has recently kept rates steady and reiterated its approach of gradual tightening. Among the significant decliners were Advantest, which fell by 2.4%, Disco by 3.3%, Tokyo Electron by 3%, Sony Group by 2.5%, and Toyota Motor by 1.7%.