Japan’s Nikkei Stock Average Falls for Third Day as Iran Crisis Fuels Stagflation Concerns (UPDATE 1)

Reuters

13:15 JST, March 16, 2026 (updated at 16:50 JST)

TOKYO, March 16 (Reuters) – Japan’s Nikkei share average closed in the red on Monday for a third consecutive day, as the Middle East crisis raised concerns about longer-term economic damage from higher energy prices and a weaker yen.

The benchmark Nikkei 225 Index edged 0.1% lower to close at 53,751.15, after earlier falling as much as 1.3%. The broader Topix slid 0.5% to 3,610.73.

The Nikkei has lost almost 9% since the start of U.S. and Israeli air strikes on Iran more than two weeks ago, as the conflict spread into neighboring countries and paralyzed shipment of petroleum through the Strait of Hormuz.

Shares briefly turned up after U.S. President Donald Trump said he is urging other countries to help safeguard shipping routes.

Japan does not currently plan to dispatch naval vessels to escort ships in the Middle East, Prime Minister Sanae Takaichi said. Meanwhile, Finance Minister Satsuki Katayama said the government is prepared to take decisive steps in financial markets, as the yen sank close to the psychologically important 160-per-dollar line.

The market seems to be growing increasingly concerned about stagflation, where economies are gripped by simultaneous increases in inflation and declines in growth, said Maki Sawada, an equities strategist at Nomura Securities.

“Concerns about an economic slowdown due to rising oil prices are being factored in,” Sawada said. “Rather than a general selloff today, we are seeing a trend where these domestic demand sectors are performing firmly and underpinning the Japanese stock market.”

There were 65 advancers on the Nikkei index against 154 decliners. The largest gainers in the index were Ibiden , up 3.8%, followed by Screen Holdings, which advanced 3.7%.

The largest losers were utility Tokyo Electric Power , down 4.8%, followed by Isuzu Motors, which fell 4.4%.