Japanese stocks fell in morning trading against a backdrop of the expanding conflict in the Middle East and persistently high oil prices, with the Nikkei 225 down 0.8% and TOPIX down 0.3%. The rise in oil prices reflects conflicting claims by the U.S. and Italy as well as concerns over monetary policy.
In the Tokyo market, the Nikkei 225 fell 0.8% to 64,597.46 by the end of morning trading as the conflict in the Middle East expanded and oil prices rose, while TOPIX fell 0.3% to 4,032.89. Both figures were released by the Tokyo Stock Exchange.
Iran's Defense Ministry announced that the U.S. had attacked 10 vessels near the Strait of Hormuz after sinking an oil tanker. The U.S. Department of Defense, meanwhile, said it could not confirm the Iranian claim at this time. Iran described the incident as the largest vessel attack of the war.
Crude oil prices remain above $100 per barrel, and market participants broadly believe this is heightening expectations of tighter monetary policy in various countries and pushing up bond yields globally. Expectations that the Bank of Japan will accelerate the pace of tightening are also weighing on the market.
The market widely expects the Bank of Japan to raise interest rates next week, and investors may adopt a cautious stance ahead of U.S. consumer price data, the Federal Reserve's policy decision and the Bank of Japan's decision. Akiyama Wataru (秋山渉) said that rising oil prices and interest rates were weighing on Japanese stocks overall.
Among individual stocks, Nintendo led the decline in the Nikkei 225, falling 5.8%, while Fujikura and Furukawa Electric also fell in succession. Oil and coal stocks rose, while securities and banking stocks gained on expectations of higher interest rates.