Japan's Nikkei closes lower as oil price jump dims corporate outlook

TOKYO: Japan’s Nikkei share average closed lower on Monday as investors weighed the corporate outlook after the renewed Middle East conflict raised oil prices.

The Nikkei fell 1.92% to 67,242.73, while the broader Topix lost 0.71% to 4,007.49.

“The market was concerned about increasing costs due to the rise in oil prices, and this came as the earnings season for Japanese firms kicked off,” said Daisuke Hashizume, a senior analyst at Daiwa Securities.

Oil prices jumped more than 4% on Monday as energy shipments via the Strait of Hormuz remained under threat, with the U.S. and Iran announcing renewed military strikes.

Chip-related stocks dragged the Nikkei lower, with Advantest and Tokyo Electron falling 3.39% and 2.25%, respectively.

Memory maker Kioxia tanked 12.86%.

“As the market eyes memory prices, the Nikkei is being influenced by South Korea’s benchmark index, which is heavily weighted toward memory makers, such as SK Hynix,” said Daiwa’s Hashizume.

The Nikkei extended its losses later in the session as South Korea’s benchmark KOSPI tumbled, triggering circuit breakers to suspend trading temporarily.

Shares in SK Hynix fell more than 15% on Monday as investors booked profits, after a high-profile U.S. listing saw the world’s leading AI memory chipmaker surge 12.8% in its Nasdaq debut on Friday.

In Japan, Yaskawa Electric tanked 14.34% to a daily limit low of 5,972 yen after the robot maker’s first-quarter net profit fell 21.7%.

Gains in bank shares, which came as investors shifted their focus to value stocks from AI-related shares, capped the Topix’s decline. Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group rose 2.31% and 1.63%, respectively.

Of more than 1,500 stocks trading on the Tokyo Stock Exchange’s prime market, 36% rose, 60% fell, and 2% traded flat.