The Nikkei index fell 1,007 points or 1.9% in the morning session, and the US dollar rose back above the 159 level against the Japanese yen

Japanese stocks initially rose and then fell in the early market. Driven by optimistic expectations that the US-Iran conflict may come to an end, Japanese stocks rose in the early session. However, US President Trump stated in a televised speech that there would be extremely severe strikes against Iran in the next two to three weeks, reversing market sentiment. The Nikkei average opened up 327 points, briefly rising 518 points to a high of 54,258 points, but then significantly declined, closing at 52,731 points, down 1,007 points or 1.9%.

In the AI and semiconductor sector, Advantest (6857.JP) and Kioxia (285A.JP) fell by 5.8% and 4.6%, respectively, while Tokyo Electron (8035.JP) dropped 2.7%. SoftBank (9984.JP), Discus (6146.JP), and Renesas Electronics (6920.JP) declined by 1.4% to 1.9%. Fiber optic and wire stocks such as Furukawa Electric (5801.JP), Sumitomo Electric (5802.JP), and Fujikura (5803.JP) fell by 3.5% to 4%.

Metal stocks also declined, with JX Metals (5016.JP) down 5.7%, and Sumitomo Metal Mining (5713.JP) and Mitsui Mining & Smelting (5706.JP) down 4% and 4.6%, respectively. In the rare earth sector, Mitsui Ocean Development (6269.JP) fell 7.2%, while trading company Sumitomo Corporation (8053.JP) dropped 2.2%, and oil stock Inpex (1605.JP) fell 2.3%.

In other stocks, Fast Retailing (9983.JP) fell 0.4%, Mitsubishi UFJ Financial (8306.JP) and Tokio Marine (8766.JP) dropped 2.1%, and Mizuho Financial (8411.JP) fell 2.9%. Tokyo Electric Power (9501.JP), Ryohin Keikaku (7453.JP), and Shiseido (4911.JP) declined by 1.7% to 2.4%, while Nintendo (7974.JP) fell 3.7%. Shipping stocks such as Nippon Yusen (9101.JP) and heavy industry stocks like Mitsubishi Heavy Industries (7011.JP) rose by 2.4% and 2.6%, respectively.

The US dollar rose back to the 159 level against the Japanese yen, currently reported at 159.43