The Nikkei 225 Index sank 3.61% to close at 54,245, while the broader Topix Index dropped 3.67% to 3,634 on Wednesday, marking a third consecutive session of losses. The selloff swept across the region as the escalating war in the Middle East rattled investor sentiment. The conflict widened after Israel struck targets in Lebanon and Iran stepped up missile and drone attacks on Israel, Saudi Arabia, the UAE, Oman, and Bahrain.
Mounting fears over the war’s impact on energy prices, inflation, and interest rate expectations further unnerved markets. Bank of Japan Governor Kazuo Ueda cautioned that the Middle East conflict could significantly affect Japan’s economy, suggesting the central bank is likely to keep interest rates unchanged for an extended period.
Losses were broad-based and led by major index constituents, including Fujikura (-7.2%), JX Advanced Metals (-9.3%), SoftBank Group (-7.2%), Sumitomo Mitsui (-6.5%), and Toyota Motor (-4.9%).
