Middle East Tensions Weighed On Japan and Asian Markets

Akira Ito
23 Mar, 2026
Tokyo

Japan's indexes extended losses of the previous week amid rapidly escalating tensions in the Middle East.

The Nikkei 225 stock average dropped as much as 4%, and the broader Topix index decreased 3.5%.

Brent crude oil prices jumped to as high as $115 a barrel as the leaders of the U.S. and Iran exchanged sharp comments over the reopening of the Strait of Hormuz. 

Despite the U.S. president's claims of war nearing the end, the militaries of the U.S. and Israel are preparing for a ground offensive through the borders with Iraq and Pakistan. 

At least 3,000 U.S. Marines are expected to cross with the help of Kurds in the north and Baluchis in the southeast.

Benchmark indexes in China, Hong Kong, Idia and Asia plunged between 2.5% and 4% amid escalating tensions in the Middle East. 

Elevated fuel prices continued to fuel inflation worries among major central banks, supporting the hawkish stance on future rate outlooks. 

The Bank of Japan left its benchmark rates unchanged and signaled its readiness to raise them if needed.

 

Japan Indexes and Stocks 

The Nikkei 225 stock average dropped 3.5% to 51,515.49, and the broader Topix declined 3.4% to 3,486.44. 

Technology, financial, and consumer stocks led decliners in Tokyo trading on Monday as inflation worries overshadowed market sentiment. 

Tokyo Electron, Advantest Corp., SoftBank Group, and Kioxia Holdings fell between 2% and 5%. 

Mitsubishi UFJ Financial, Mizuho Financial, and Sumitomo Mitsui Financial dropped between 4% and 6%. 

Fast Retailing, Seven & I Holdings, and Isetan Mitsukoshi Holdings decreased between 2% and 4%. 

Nippon Yusen Corp., Mitsui O.S.K. Lines, and Kawasaki Kisen Kaisha dropped between 5% and 9%.