The Nikkei was down 0.3% at the midday break against a backdrop of uncertainty over the Middle East, and is expected to end the week down about 4%. It could post its biggest weekly decline in more than a month.
The Nikkei was down 0.3% at the midday break in Tokyo trading, with the market expected to end the week down about 4%. It is set for its biggest weekly decline since the week ended 17 July.
The TOPIX was down 0.1%, with a weekly decline of about 3.4% expected. Crude oil prices rose about $2 overnight after the US Treasury secretary indicated that tough sanctions could be imposed on Iran, amid heightened tensions in the Middle East.
In the bond market, the yield on Japan's 10-year government bond rose 3 basis points to 2.875%. Higher oil prices and growing concerns have driven bond yields higher.
Among individual stocks, Fast Retailing, which operates Uniqlo, plunged 4% and was the main contributor to the Nikkei's decline. The marine transportation sector, meanwhile, rose 2.8% on expectations that the Strait of Hormuz could be closed.
Overall, movements in the Nikkei were balanced across the broader market, but individual stocks showed a wide divergence, with 119 decliners, 103 advancers and 3 unchanged.