Nikkei Plunges 1.8% as US-Iran Tensions Hammer Tech Stocks
The Nikkei 225 tumbled 1.83% to close at ¥37,502 on Thursday as escalating US-Iran military tensions sent shockwaves through global markets, with Japanese technology and industrial stocks bearing the brunt of the selloff amid renewed geopolitical uncertainty.
Yen Weakness Fails to Support Exporters
Despite the USD/JPY rate holding near ¥160.47, which typically benefits Japanese exporters through favorable currency translation, the broader risk-off sentiment overwhelmed any currency tailwinds. Major export-dependent names like Sony Group fell 2.58% to ¥3,333.02 and Kyocera dropped 2.38% to ¥3,520.86, as investors prioritized capital preservation over potential forex gains.
Industrial Giants Lead Market Decline
The session’s biggest casualties came from Japan’s industrial and technology sectors, with robotics leader Fanuc suffering the steepest decline at 6.04% to ¥3,310.54. SoftBank Group, already under pressure from its tech portfolio exposure, fell 3.82% to ¥3,154.81. Air conditioning giant Daikin Industries rounded out the major losers with a 3.52% drop to ¥2,467.65, reflecting broader concerns about global economic stability and capital expenditure cycles.
The selloff mirrored weakness across Asian markets, with Indian shares also retreating on the Iran conflict news. Oil prices surged more than $1 per barrel as traders priced in supply disruption risks, while gold steadied after hitting six-month lows as safe-haven demand competed with rising yields.
BOJ Policy Outlook Remains Steady
With the Bank of Japan’s next policy meeting scheduled for April 28, 2026, market participants are maintaining expectations for a rate hold at current levels. Governor Ueda’s commentary will be closely watched for any shifts in tone regarding US-China trade tensions and their impact on Japan’s export-driven economy. Current market positioning suggests a dovish hold would weaken the yen further, while any unexpected hawkish signals could provide support to the currency.
Thursday’s decline underscores how quickly geopolitical developments can derail market momentum, even when fundamental currency conditions appear supportive. As tensions between the US and Iran continue to evolve, Japanese investors will be watching for any escalation that could further disrupt global supply chains and trade flows, particularly given Japan’s heavy reliance on Middle Eastern energy imports and its role in global technology supply chains.
This article is for informational purposes only and does not constitute investment advice. Past performance does not guarantee future results.