Nikkei 225 falls 2.85% to four-week low on rising yields, oil

The Nikkei 225 Index fell 2.85% to close at 64,325 on Wednesday, reaching a four-week low as rising global bond yields and oil prices pressured equities. Oil prices advanced for a third straight session amid escalating hostilities between the US and Iran, lifting inflation risks and pushing global bond yields higher. Japan’s 10-year government bond yield rose to 3% for the first time since 1996, supported by expectations for a Bank of Japan rate hike. Governor Kazuo Ueda said this week that policymakers need to pay more attention to upside price risks in monetary policy, signalling that a rate increase is likely later this month.

Tech and AI-related stocks led declines, with Advantest down -2.5%, Fujikura -3.9%, Taiyo Yuden -4.6%, Tokyo Electron -3.4% and SoftBank Group -6.4%. Financial, consumer and industrial shares also fell sharply.