Japan’s Nikkei Stock Average Falls 5% as Surge in Oil Prices Fans Economic Slowdown Fears

Reuters

16:19 JST, March 9, 2026

TOKYO, March 9 (Reuters) – Japan’s Nikkei average dropped more than 5% to a one-month low on Monday amid a broad selloff, as a surge in oil prices fanned fears of inflation and an economic slowdown.

The Nikkei .N225 fell 5.2% to 52,728.72, its lowest close since February 2, while the broader Topix .TOPX slipped 3.8% to 3,575.84.

The Nikkei average futures NIc1 fell as much as 7.8% during the session, close to a level that could have triggered the circuit breaker to suspend trading.

Just two weeks ago, both the Nikkei and Topix hit record highs on expectations of profit growth, backed by Prime Minister Sanae Takaichi’s stimulus and an artificial intelligence-driven rally.

“The market started taking the impact of the Middle East conflict more seriously. Until last week, there was some optimism and investors picked up stocks on dips, but now there is a question about the market upside,” said Hitoshi Asaoka, chief strategist at Asset Management One.

“The Nikkei’s decline at today’s pace is justifiable if the Middle East conflict drags on.”

Oil prices surged more than 25% on Monday to their highest levels since mid-2022 as some major producers cut supplies and fears of prolonged shipping disruptions gripped the market due to the expanding U.S.-Israeli war with Iran.

Meanwhile, Iran on Monday named Mojtaba Khamenei to succeed his father, Ali Khamenei, as supreme leader, signaling that hardliners remain firmly in charge, as the week-old U.S.-Israeli war with Iran pushed oil above $100 a barrel.

Chip-related shares tumbled, with Advantest 6857.T and Tokyo Electron 8035.T lost 11.03% and 6.87%, respectively.

Bank shares fell, with Mitsubishi UFJ Financial Group 8306.T and Sumitomo Mitsui Financial Group 8316.T losing more than 3% each.

The market is worried about the negative effect of the oil price surge on corporate profits, said Shoichi Arisawa, general manager of the investment research department at IwaiCosmo Securities.

All 33 industry sub-indices of the Tokyo Stock Exchange fell, with the nonferrous metals sector .INFRO.T losing 8.38% to become the worst sector.