Nikkei Plunges as Iran Crisis Sends Oil Prices Surging

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Japanese stocks fell hard Monday as rising tensions in the Middle East shook global markets and sent oil prices higher.

In morning trading, the Nikkei 225 at one point dropped more than 4,200 points from March 6's close. By late morning, it was down 4,101.37 points at 51,519.47. The broader TOPIX index fell 219.62 points to 3,497.31, showing the selloff was widespread.

Deepening Market Anxiety

The selloff came as crude oil rose above $110 a barrel in early trading. Investors worried that rising tensions around Iran could disrupt energy supplies, a particular risk for Japan, which relies heavily on Middle East oil.

Oil prices have surged on fears that fighting could affect shipments through the Strait of Hormuz, one of the world's most important oil routes. About a fifth of the global oil supply typically passes through the waterway. Any disruption there could tighten supply and keep prices elevated.

*Black smoke rises from Bahrain's capital, Manama. February 28 (©Reuters)*

The jump in oil prices hit markets across Asia. Stocks fell broadly, with South Korea's KOSPI down more than 6%, as investors pulled back from riskier assets.

Weak Yen Adds to Inflation Fears

The yen also weakened sharply, nearing ¥160 JPY to the dollar. That added to concerns in Japan, since a weaker currency makes imported energy and other goods more expensive.

Market analysts say the sell-off reflects growing concern that a prolonged conflict in the Middle East could trigger a new inflation shock, especially if oil prices remain elevated. Some estimates suggest crude prices could climb further if shipping routes remain disrupted or production cuts spread among Gulf producers.

Technology and financial stocks led the decline in Tokyo. Major firms included SoftBank and semiconductor equipment makers among the hardest hit.

Despite the scale of the drop, investors are closely watching geopolitical developments and energy markets to gauge whether the sell-off will deepen or stabilize in the coming days.