Japan Shares and Yen Fall, Jgbs Rise as Iran Strikes Continue

Reuters

16:18 JST, March 2, 2026

TOKYO, March 2 (Reuters) – Japanese shares and the yen fell on Monday, while government bonds rose, as investors saw no clear end to U.S. and Israeli military strikes following the killing of Iran’s leader.

The benchmark Nikkei 225 Index .N225 fell 1.3% to close at 58,057.24, its steepest drop in five weeks. The broader Topix .TOPX slid 1%.

The yen weakened 0.6% to 156.95, while the yield on the 10-year Japanese government bond JP10YTN=JBTC fell 5 basis points (bps) to 2.06%.

Bond yields move inversely to prices.

Global markets were roiled, as Israel launched a new wave of strikes on Iran, and Tehran retaliated with more missile barrages following the killing of Supreme Leader Ali Khamenei. U.S. President Donald Trump signaled that the assault on Iranian targets could continue for weeks.

Airlines were among the biggest decliners, while bank and brokerage shares were hit hard after British’s mortgage provider Market Financial Solutions filed forbankruptcy.

A 10% rise in crude oil prices could push the net profit of Topix-listed companies down about 1% to 2%, said Kazunori Tatebe, chief strategist at Daiwa Asset Management.

“The market is uncertain whether the conflict will go on for a long time or end soon. If it is escalated, the rise in oil prices will hit Japanese firms’ earnings,” Tatebe said.

Chip-related heavyweights dragged on the Nikkei, with Advantest6857.T losing 3.9% and Tokyo Electron 8035.T falling 1.1%.

Japan’s largest airline ANA Holdings 9202.T slid 5.4%, while the country’s biggest brokerage Nomura Holdings 8604.T fell 6.8%, leading declines on the Nikkei.

However, the energy explorers’ index .IMING.T jumped 6.3%, while Inpex 1605.T climbed 6.1% to become one of the sharpest gainers on the Nikkei.

The Nikkei index is coming off February’s steep 10.4% rise, its best month in four. The benchmark had closed at an all-time high of 58,850.27 on Friday.

“The market was hit just after the Nikkei posted a record high last week,” said Takamasa Ikeda, a senior portfolio manager at GCI Asset Management.

“The Middle Eastern conflict has become an excuse to sell stocks and book profits.”