Due to rising geopolitical risks in the Middle East, the Japanese stock market experienced widespread sell-offs on Monday. The Nikkei 225 index closed down 3.48% at 51,515.04 points, with an intraday loss reaching as much as 5%. The TOPIX index fell 3.41% to 3,486.44 points, both marking multi-month lows at the close.
Sector Performance
The semiconductor sector became a major drag. As key index heavyweight stocks, Advantest and Tokyo Electron fell by 5.21% and 2.62%, respectively. Tech stocks were notably pressured under the dual stress of declining risk appetite and rising interest rate expectations.
Market Structure
In terms of market breadth, over 90% of stocks on the Tokyo Stock Exchange's main board declined, with only about 4% advancing, indicating a systemic nature to the sell-off rather than adjustments in individual sectors. Such broad pullbacks are usually closely tied to macro risk events.
Inflation and Interest Rate Path
Analysts point out that rising oil prices are altering market assessments of policy paths. If energy prices continue to rise, it will reinforce the stickiness of global inflation, further delaying the cycle of interest rate cuts and even posing the risk of another rate hike. This expectation pressures valuation-sensitive assets.
Focus Ahead
In the short term, the market's focus is on three areas: whether the Middle East conflict will further escalate, if oil prices will consistently hold at high levels, and whether global central bank policy signals will turn hawkish. If these factors converge, Japanese stocks may face further downward pressure.
