Nikkei Slumps as Oil Surges Past $100 Amid Escalating Middle East Tensions

The Japanese stock market took a hit on Thursday as oil prices surged past $100 per barrel. The Nikkei share average fell 0.8% to close at 64,597.46, while the broader Topix lost 0.3% to 4,032.89.

According to Wataru Akiyama of Nomura Securities, 'the rise in crude oil prices and interest rates are acting as a drag' on the market. The Bank of Japan is widely expected to raise interest rates next week, which will likely push global bond yields higher.

The Strait of Hormuz has become a hot spot for conflict, with Iran attacking 10 ships near the strait in response to US actions against Iranian oil tankers. This escalation has sent oil prices soaring and put pressure on global markets.

Nintendo was one of the biggest losers in the Nikkei, down 5.8%, while data centre cable makers Fujikura and Furukawa Electric dropped 5.7% and 4.8%, respectively. However, oil and coal-related stocks were among the best performers, gaining 1.1%.