Japanese Shares Drop on MidEast Tensions

The Nikkei 225 Index dropped 1.5% to around 67,500 while the broader Topix Index lost 0.2% to 4,026 on Monday, as Japanese equities came under pressure from escalating tensions in the Middle East, keeping inflationary pressures and interest-rate hike expectations in focus. The US and Iran exchanged fresh missile strikes over the weekend amid ongoing disputes over shipping through the Strait of Hormuz, driving oil prices higher. Investors are also awaiting a wave of corporate earnings reports from Wall Street this week, which will serve as a key test of whether the artificial intelligence-driven market rally can be supported by strong corporate results. Among individual stocks, Kioxia Holdings (-1.8%), Taiyo Yuden (-4.8%), and Yaskawa Electric (-14.2%) led the declines, while SUMCO Corp (7.9%), SoftBank Group (2%), and Mitsubishi UFJ (2.4%) posted solid gains.

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