Japanese stocks volatile amid Middle East tensions

Over the period from late July to early August 2026, the Japanese stock market experienced significant volatility, with the Nikkei 225 index swinging sharply between gains and losses. The market was influenced by mixed cues from Wall Street, fluctuations in the yen, and geopolitical tensions in the Middle East, particularly involving Iran, the Houthis, and Saudi Arabia. Technology stocks, including Advantest, Tokyo Electron, and Screen Holdings, were among the most volatile, while financial stocks such as Mizuho Financial Group, MUFG, and SMBC Group also saw notable swings. Automakers like Toyota and Honda were affected by currency movements and global demand concerns. Crude oil prices fluctuated sharply due to geopolitical events, including attacks on tankers in the Red Sea and the temporary closure of the Strait of Hormuz. The Japan — Bank of Japan's monetary policy and inflation data also influenced market sentiment. Overall, the Japanese market experienced a period of heightened uncertainty and risk aversion, with the Nikkei 225 moving between approximately 62,000 and 65,000 points.