The Nikkei 225 extended its gains, but upside remained capped as higher oil prices weighed on the market, which continued to trade around ¥67,000. Oil prices rose amid renewed tensions in the Middle East, prompting notable buying in mining and bank stocks, while textile, pharmaceutical and rubber product stocks fell.
The Nikkei 225 rose ¥69.96 from the previous day to ¥67,040.18 in Tokyo trading on the 12th, with trading volume estimated at 1.18884 billion shares. The index opened slightly higher, but upside remained capped after buying subsided, and it traded in a range around ¥67,000.
Market participants believe investor sentiment has cooled amid renewed geopolitical risks in the Middle East, with the situation between the United States and Iran over the Strait of Hormuz and rising crude oil futures weighing on the market. NY crude oil futures moved into the $84-per-barrel range. Against the backdrop of higher oil prices, funds flowed into mining and bank stocks, while textile, pharmaceutical and rubber product stocks were sold.
Semiconductor-related and high-tech stocks provided support for the market overall. Stock-specific buying based on strong earnings was active, with Tokyo Electron making the largest positive contribution to the index, followed by Kioxia Holdings. Fast Retailing, SoftBank Group, Lasertec, Disco, HOYA and Honda Motor, among others, fell.
For the afternoon session, the market is expected to remain range-bound around ¥67,000, with higher oil prices and movements in long-term U.S. Treasury yields likely to continue weighing on sentiment. As the earnings season enters its final phase, selective buying of companies with strong results is expected to continue, and some market participants believe fund inflows into mining and banking stocks will support the market's overall firmness.