TOKYO, March 9, 2026, 18:01 JST
Tokyo shares tumbled Monday. The Nikkei dropped 2,892.12 points, a 5.2% slide to 52,728.72—marking its third-heaviest point loss on record, triggered by a flight from risk as oil prices surged. The Topix also slid, losing 3.8% and closing at 3,575.84.
It’s a pressing issue for Japan, which leans hard on imported fuel. Prime Minister Sanae Takaichi said the government is weighing measures to soften the blow from pricier gasoline, as crude prices spiked after the U.S.-Israeli conflict with Iran escalated. Brent briefly hit $119.50—levels not seen since mid-2022.
Stagflation’s back in the market chatter: investors shifting focus to worries over weaker growth and sticky prices, not chasing another surge. Asian stocks took a beating—KOSPI in South Korea tumbled 8.2%, while China’s CSI300 slipped 1.7% earlier. Tokyo managed to pare some of its drop after the Financial Times said G7 finance chiefs planned talks with the International Energy Agency about a possible emergency oil release.
Stocks weren’t the only thing under pressure. Tokyo markets saw a triple whammy: the dollar/yen shot past 158.60 for a moment, while 10-year Japanese government bond yields hit 2.210% during the session as traders unloaded both bonds and the yen.
Daisuke Hashizume, senior strategist at Daiwa Securities, pointed out that earlier optimism for a pro-U.S. shift in Iran’s leadership quickly evaporated, with the surge in oil prices dragging stagflation worries back into the spotlight. The selloff was broad—every one of the 33 industry groups closed in the red. Chip and AI-adjacent stocks took a sharper hit: Advantest plunged over 11%, SoftBank Group tumbled more than 9%, Tokyo Electron shed upwards of 6%. Fujikura, for its part, sank almost 10% after Bloomberg News said Oracle and OpenAI had scrapped plans for an AI data center expansion in Texas.
The pullback stands out, given the Nikkei just notched a record intraday peak of 58,015.08 on Feb. 12. Even as late as Feb. 24, a Reuters poll of 15 equity strategists pointed to a target of 60,750 by mid-2027—highlighting the speed of sentiment’s swing as an energy shock rattles a market that had been buoyed by earnings momentum and steady foreign inflows.
The path to steadier trading exists, but it’s a slim one. Akira Nagatsuma, an opposition lawmaker, said Tokyo directed a national oil reserve facility to get ready in case a release is needed. With governments across Asia hustling to contain the impact, G7 ministers are on track to talk through wider supply support.
The risks aren’t hard to spot. Keidanren Chairman Yoshinobu Tsutsui warned that markets have already begun “sending a warning” on the dangers of a drawn-out conflict and stagflation. IMF Managing Director Kristalina Georgieva, during remarks in Tokyo, pushed policymakers to “think of the unthinkable and prepare for it.” She flagged that if oil prices stay 10% higher, global inflation could jump by 40 basis points—equal to 0.4 percentage point. Reuters Japan
