Japan's Indexes Dropped 3% as Oil and Bond Yields Surged

Akira Ito
11 Sep, 2026
Tokyo

Japan's benchmark indexes extended steep weekly losses on Friday as surging oil prices and global bond yields weighed heavily on stocks. 

The Nikkei 225 Stock Average dropped nearly 3%, and the broader TOPIX fell as much as 1.9% before recovering in the second half of the session. 

Brent crude oil prices per barrel increased by 0.3% to $107.90, as the ongoing war between the U.S. and Israel against Iran is expected to last for several more years. 

Moreover, Iran-backed Houthi rebels gained control of a key port in Yemen, lifting risks to Saudi oil tankers traveling through the Red Sea. 

The Trump administration officials and U.S. military commanders confirmed that the war on Iran is likely to extend to several more years as the U.S. struggled to replenish missiles and air strike capabilities. 

Iran's leadership also confirmed that the Islamic Republic is ready for an extended war despite severe economic costs. 

Market sentiment in Japan and Asia was weak after the yield of the U.S. Treasury notes advanced to 4.97%, a sharp escalation after the U.S. producer price inflation accelerated to 5.4% in August from 4.8% in July. 

The yen traded at a seven-month high ahead of the Bank of Japan's rate decision next Friday. 

Domestically, Japan's producer price inflation remained elevated in August and stayed above the 7% mark for the third consecutive month. 

Japan's producer price index rose 7.6% annually in August, following an upwardly revised 7.7% rise in the prior month, which had been the fastest increase since February 2023. 

On a monthly basis, the measure of wholesale inflation declined 0.2%, reversing an upwardly revised 0.4% rise in July and marking the first monthly decline in a year.     

Prices continued to grow for all components, including food and beverage prices accelerating to 4.3% from 4.0% and chemicals to 13.9% to 13.8%, but petroleum & coal easing to 14.7% from 17.6%. 

 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average dropped 2.9% to 63,447.39, and the broader TOPIX declined 0.9% to 4,018.19. 

For the week, the Nikkei 225 Stock Average dropped nearly 4%, and the TOPIX decreased 2.8%. 

Tech stocks led decliners in Friday's trading as rising bond yields negatively impacted the value of the future earnings stream. 

Kioxia Holdings declined 7.7% to ¥53,590.0, Tokyo Electron eased 4% to ¥50,670.0, and Advantest Corp. fell 7.4% to ¥31,420.0. 

Nippon Yusen KK advanced 1.7% to ¥7,323.0, Mitsui OSK Lines increased 1.5% to ¥7,085.0, and Kawasaki Kisen Kaisha Ltd. gained 3.4% to ¥3,401.0.