Japanese Stocks Fall, Energy Facility Attacks Spark Inflation Concerns
The Nikkei 225 index fell 3.38% to close at 53,372 on Thursday, while the Topix index fell 2.91% to 3,609, reversing the previous session's gains. The decline was triggered by a surge in oil prices following new attacks on energy facilities in the Middle East, which rekindled inflation concerns and dampened risk appetite.
Japan is one of the most sensitive markets to energy shocks due to its heavy dependence on oil imports from the Middle East. When oil rises sharply, the market tends to anticipate imported inflationary pressures and cost burdens for companies, making cyclical stocks and cost-sensitive sectors more susceptible to being dragged down.
Sentiment was also weighed down by a sharp sell-off on Wall Street overnight, triggered by a sluggish US PPI data and the Fed's rising inflation projections. This combination narrows the window for interest rate cuts, pushes yields higher, and depresses global equity valuations the impact of which is also felt in Japan.
On the policy front, the Bank of Japan held interest rates at 0.75%, as expected. However, market attention was drawn to repeated dissent: board member Hajime Takata, for the second consecutive year, pushed for a 25-bps rate hike to 1%, citing upward inflation risks. On the stock market, technology stocks led the decline, including Kioxia (-4.4%), Advantest (-4.6%), and Disco (-1.6%). Japanese markets will be closed on Friday for a national holiday. (CP)
Source: Newsmaker.id
