Nikkei Drops for Third Session
Japanese stocks fell for a third straight session on Monday, tracking Wall Street's decline and escalating Middle East tensions that have kept oil prices high.
The Nikkei 225 index fell 0.7% to around 61,000, while the Topix index fell 0.5% to 3,845. Markets assessed that inflation risks were reinforcing as geopolitical disruptions could potentially keep energy prices high.
On the geopolitical front, President Donald Trump warned Tehran that time was running out to reach a deal with Washington. Iranian media also reported that the two sides remained far apart in negotiations, prolonging uncertainty surrounding the conflict.
Sentiment was also weighed down by a rise in US bond yields on Friday, following a sharp sell-off in the Treasury market. The surge in yields was driven by expectations that the Federal Reserve could need to raise interest rates this year to curb inflationary pressures related to the Iran conflict.
Rising yields typically tighten financial conditions and put pressure on stock valuations, especially in sectors sensitive to financing costs. Under these conditions, the oil price rally reinforces the "higher interest rates for longer" narrative, which is a drag on risk assets.
On the Tokyo Stock Exchange, technology stocks led the decline. Kioxia Holdings fell 8.3%, Fujikura fell 2.4%, and SoftBank Group fell 1.7%.
On the corporate side, Mizuho Financial fell nearly 7% after reports suggested the company was considering a potential investment in Rakuten Bank. The market will monitor the direction of oil prices, movements in US yields, and developments in US-Iran negotiations as future sentiment will be determined. (asd)
Source: Newsmaker.id
