Japan Stocks Suffer Double Blow from Oil Price Surge and Higher Yields

Japanese stocks plummeted as oil prices surged following fresh US-Iran strikes, casting fears of disrupted Middle East supply and higher energy costs. This double whammy sent investors scrambling for cover.

The 10-year Japanese government bond yield touched a high of 3.01%, its highest since September 1996, while the two-year yield reached 1.83%, the highest since April 1995, as markets priced in a faster pace of Bank of Japan rate hikes.

This sharp rise in yields is particularly concerning for long-term growth stocks, such as SoftBank Group and chip-equipment makers Tokyo Electron and Advantest, which tend to be heavily affected by changes in the discount rate used to value future profits.