Oil Price Surge Sends Nikkei Below 66k

The Japanese stock market declined on Tuesday, with the Nikkei 225 Index falling 0.6% to below 66,000.

This drop was influenced by rising oil prices, which fueled concerns about inflation and strengthened expectations for near-term interest rate hikes.

Investors were also affected by a weak lead from Wall Street overnight, where Treasury yields increased on growing bets that the Federal Reserve will raise interest rates this month.

The Bank of Japan is being considered as a potential raiser of interest rates in September due to concerns over persistent yen weakness and import-driven inflation.

The technology and AI-related sector led the decline, with notable losses from Fujikura (-3%), Advantest (-2.9%), Tokyo Electron (-4.6%), Taiyo Yuden (-1.5%), and Murata Manufacturing (-1.4%).