Nikkei Plunges as Oil Prices Soar and Japan Tightens Monetary Policy

Japan's Nikkei share average plummeted on Thursday as global markets suffered from oil prices breaching the $100-per-barrel mark. The Middle East conflict widened, with Iran attacking 10 ships near the Strait of Hormuz in response to the U.S. sinking five Iranian oil tankers.

Rising speculation about an accelerated pace of Bank of Japan policy tightening also weighed on the market, with interest rates expected to rise next week. 'For the Japanese stock market as a whole, the rise in crude oil prices and interest rates are acting as a drag,' said Wataru Akiyama, Nomura Securities strategist.

The Nikkei lost 0.8% to end the morning session at 64,597.46. The broader Topix fell by 0.3%. Higher oil prices pushed global bond yields higher on expectations that central banks would respond with tighter policy.