Japan’s Nikkei Stock Average Set for Biggest Weekly Drop in 11 Months on Middle East Conflict

Reuters

12:04 JST, March 6, 2026

TOKYO, March 6 (Reuters) – Japan’s Nikkei share average on Friday was on track for its steepest weekly percentage drop in almost a year, as renewed concerns over Middle East conflict prompted investors to sell riskier assets.

As of 0219 GMT, the Nikkei 225 Index .N225 was flat after dropping as much as 1.4% earlier in the day, on track for its worst weekly percentage decline since April 4. The benchmark index has lost nearly 6% so far this week. The broader Topix .TOPX held its ground at 3702.7.

“The (markets’) biggest concern is the rise in crude oil prices,” said Shota Sando, an equity market analyst at Tokai Tokyo Intelligence Laboratory. “If it becomes clear that oil prices aren’t likely to head toward the oft-cited $100 a barrel level, that would probably bring a sense of relief and help stabilize sentiment.”

The energy explorers’ index .IMING.T was among the worst performers in Tokyo Stock Exchange’s 33-sector sub-indexes, down nearly 3%. Shares of Inpex 1605.T fell 3% and Japan Petroleum Exploration 1662.T shed 2.6%.

The U.S. Treasury department is expected to announce measures aimed at combating rising energy prices in the wake of the Iran conflict soon, including potential action involving the oil futures market, Reuters reported.

Separately, Fujikura 5803.T, a cables and optical fiber producer, slumped 6.6%, as selling in U.S. optical-fiber stocks linked to AI data centers weighed on Japan’s nonferrous metals sector.

Casio Computer 6952.T tumbled 5.8% following an announcement that the calculator maker will be removed from the Nikkei gauge from April.

On the flip side, software-related shares rose, mirroring the U.S. markets overnight. Shift 3697.T gained 6.6% and Baycurrent 6532.T advanced 6.2%.

There were 101 advancers in the Nikkei against 122 decliners.