Japanese stocks fell on Monday as peace talks between the United States and Iran failed over the weekend, and the U.S. Navy prepared to block Iranian ports, raising doubts about the sustainability of the current ceasefire.
The Nikkei .N225 dropped 0.7% to close at 56,502.77 after posting its biggest weekly gain in over a year last week. The broader Topix .TOPX slid 0.5% to 3,723.01.
U.S. President Donald Trump said on Sunday that the U.S. Navy would begin blocking the Strait of Hormuz, a chokepoint for 20% of the world’s daily energy supplies that Iran has effectively closed since the end of February. The announcement sent oil prices above $100 a barrel at the start of Monday.
“I don’t think there were many investors expecting everything to be agreed (during the weekend talks) and go smoothly,” said Shuutaro Yasuda, a market analyst at the Tokai Tokyo Intelligence Laboratory.
“That being said, it’s obviously not good news, and stocks are falling. But I think the reason we’re not seeing a really extreme risk-off move is precisely that.”
Market breadth was negative, with 158 decliners versus 63 advancers for the Nikkei.
Toto 5332.T dropped as much as 8.8%, its biggest decline since August 2024, after the Nikkei business daily reported that the bathroom equipment and sanitary ware manufacturer had suspended orders for unit baths due to a shortage of organic solvents made from petroleum-derived naphtha. The company ended Monday down 7.2%, making it the top loser on the Nikkei index.
Ibiden 4062.T, a chip packaging and electronics company, fell 5.1%, while semiconductor manufacturing equipment maker Tokyo Electron 8035.T declined 3.6%.
On the other hand, Dentsu Group 4324.T surged 10.6%, becoming the top percentage gainer on the index after an updated report on shareholdings showed an entity linked to veteran activist investor Yoshiaki Murakami appeared on the list of shareholders of Japan’s largest advertising and marketing company.
Yaskawa Electric 6506.T, an industrial robot and motion control systems manufacturer, jumped 7.1% following strong profits and a dividend increase announced last week. Inpex 1605.T, Japan’s largest oil and gas explorer, gained 3.1%.
