Japan stocks fall on oil surge and inflation worries

Japanese stocks fell sharply on Thursday, with the Nikkei 225 dropping 3.38% to 53,372 and the Topix Index losing 2.91% to 3,609, reversing gains from the previous session.

The decline came as oil prices surged after fresh attacks on Middle East energy facilities, raising inflation concerns for Japan, which relies heavily on imported oil. Weakness in Wall Street overnight also weighed on sentiment, as strong US inflation data reduced expectations for interest rate cuts.

The Bank of Japan kept its policy rate unchanged as expected, though one board member again pushed for a rate hike citing inflation risks. Technology stocks led the losses, with names like Kioxia Holdings, Advantest, Disco Corp, Lasertec, and SoftBank Group all falling notably.

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