The Nikkei 225 Index declined by 2.85%, closing at 64,325 on Wednesday, reaching four-week lows as rising global bond yields and oil prices exerted significant pressure on equities. Oil prices increased for a third straight session as tensions between the US and Iran intensified, raising inflationary concerns and driving global bond yields upward.

Japan’s 10-year government bond yield has attained 3% for the first time since 1996, bolstered by increasing expectations for a Bank of Japan interest rate hike. Governor Kazuo Ueda stated this week that policymakers must focus more on upside price risks when formulating monetary policy, indicating that a rate increase is probable later this month.

Tech and AI-related stocks experienced a downturn, highlighted by significant losses from Advantest at -2.5%, Fujikura at -3.9%, Taiyo Yuden at -4.6%, Tokyo Electron at -3.4%, and SoftBank Group at -6.4%. Financial, consumer, and industrial stocks experienced significant downturns.