Japan stocks fall as Middle East tensions dampen investor sentiment

Japanese equities declined on Thursday, with the Nikkei 225 Index dropping 2.4% to 52,463 and the broader Topix Index falling 1.6% to 3,612. The losses reversed gains from the previous session as optimism over a quick resolution to the Middle East conflict faded.

Investor sentiment weakened after comments from US President Donald Trump, who said key objectives in the Iran conflict were close to being achieved but did not provide a clear timeline for its end. He also warned that the US could intensify military action in the coming weeks, adding to uncertainty in global markets.

Although Trump suggested that the Strait of Hormuz would likely reopen once tensions ease, ongoing concerns about disruptions in this key shipping route kept energy markets volatile.

Earlier hopes of a swift end to the conflict had supported global equities, but the latest remarks shifted sentiment back to caution, leading to broad-based declines across sectors.

Major stocks weighed on the market, with heavyweights such as SoftBank Group, Tokyo Electron, and Mitsubishi UFJ Financial all posting notable losses, contributing to the overall downturn.