Japanese shares fall as US-Iran negotiations fail and a naval blockade is looming
Japanese shares closed lower on Monday after the U.S.-Iran talks broke down over the weekend. The American Navy also prepared a naval blockade of Iranian ports, raising new doubts about the sustainability of a ceasefire.
The Nikkei dropped?0.7%?to close at?56,502.77 after posting its steepest week-to-week gain in over a year last week. The Topix, which is a broader measure of the market, fell 0.5% to 3,723.01.
Donald Trump, the U.S. president, announced on Sunday that the U.S. Navy will begin blocking the Strait of Hormuz. This is a chokepoint for 20% of the world's energy supply. Iran has effectively blocked this since the start of the war in late February. Oil prices jumped above $100 per barrel on Monday morning as a result of the announcement.
Shuutaro Yasuda is a market analyst with Tokai Tokyo Intelligence Laboratory. He said: "I do not think that there are many investors who expect everything to be agreed at the weekend talks and for everything go smoothly."
Stocks are dropping because it is a bad news. "But I think that's the exact reason why we aren't seeing an extreme risk-off movement."
The Nikkei's market breadth was negative with 158 stocks declining versus 63 rising.
Toto has lost up to 8.8% of its value, the biggest fall since August 2024. The Nikkei daily reported that Toto had suspended orders for unit bathtubs because there was a shortage in organic solvents derived from naphtha. It ended Monday's trading with a loss of 7.2%. This was the largest drop in the Nikkei Index.
Tokyo Electron, which makes semiconductor manufacturing equipment, saw its shares fall 3.6%, while?Ibiden? 4062.T?, a firm that specializes in chip packaging and electronic devices, dropped 5.1%.
The 'Dentsu Group', on the other hand, rose 10.6% to become the 'top percentage gainer' of the key measure after an updated shareholder report revealed that a company linked to activist investor Yoshiaki Murakami appeared on the shareholders list 'of Japan's biggest advertising and marketing firm.
Yaskawa Electric, a maker of industrial robots and motion control systems, soared 7.1% after strong earnings and an increase in dividend announced last week. Inpex, Japan's largest oil and gas exploration company, gained 3.1%.
(source: Reuters)
