Middle East Escalation Drags Down Japanese Stocks; Nikkei Plunges Over 5%

Japan's stock market plunged sharply on March 30 amid growing concerns that persistently escalating conflicts involving Iran and the Houthi militants could drive oil prices higher and hurt the economy. The Nikkei 225 index dropped as much as 5.3%, while the broader Topix index fell 4.8%—its lowest level in nearly 15 months. Heavyweight stocks such as Toyota, SoftBank, and Ibiden led the decline, with manufacturing and electronics sectors under significant pressure. Brent crude oil prices neared $116 per barrel, intensifying worries about Japan’s economic outlook as a nation heavily reliant on oil imports. Meanwhile, the yen weakened past 160 against the U.S. dollar, hitting its lowest level since July 2024 and further undermining market confidence. Analysts noted that the combination of ex-dividend date effects and heightened geopolitical risks could push Japanese equities lower in the near term.