FX.co ★ Japanese Shares Sink to 3-Week Lows

The Nikkei 225 Index dropped 2.1% to below 63,000, while the broader Topix Index declined 1.4% to 3,793 on Thursday, with both benchmarks touching three-week lows after new US strikes against Iran pushed oil prices higher. Technology shares remained under pressure amid persistent concerns over stretched AI-related valuations, weighing heavily on Japanese firms with significant exposure to the global AI boom. Domestically, the Bank of Japan is widely expected to raise interest rates next week as policymakers grapple with surging energy costs linked to the Middle East conflict. Tech and AI-related names led the declines, with Tokyo Electron (-1.3%), Taiyo Yuden (-3.4%), SoftBank Group (-4.6%), Fujikura (-4.8%), and Advantest (-3.3%) among the notable losers. Financial and consumer stocks also weakened, exacerbating the broader market selloff.