Japan’s Nikkei 225 fell 1.12% to 67,786.86 by the midday break on Monday, as investors reassessed corporate earnings potential amid a sharp rise in oil prices.
The decline reflects growing concern that escalating energy costs will squeeze margins for Japanese manufacturers and exporters, particularly those with high fuel intensity.
72% fall to 67,763 in Wednesday’s session and a 1% decline to 71,645.
The sell-off was broad-based, with technology and industrial stocks leading the decline.
Market participants are increasingly focused on the transmission of higher input costs to corporate profitability, a theme that has gained urgency following the renewal of conflict in the Middle East.
The benchmark’s drop extends a period of choppy trading, following a 0.72% fall to 67,763 in Wednesday’s session and a 1% decline to 71,645.26 on Tuesday, which snapped an eight-session winning streak.
The renewed geopolitical tensions have pushed crude prices higher, creating a headwind for Japan’s trade-dependent economy.
Unlike the recent rally in Indian equities, which benefited from retreating crude prices, Japanese markets are now facing the opposite dynamic.