Global Markets | Japan's Nikkei reverses gains as Trump threatens more Iran attacks

Japan's Nikkei share average fell more than 2% on Thursday, reversing earlier gains as hopes for a quick end to the Middle East conflict faded after U.S. President Donald Trump vowed more strikes on Iran.

The Nikkei closed 2.38% lower at 52,463.27, after rising as much as 0.97% ‌earlier in ⁠the session. ⁠The broader Topix reversed early gains, ending 1.61% lower at 3,611.67.

In a televised speech, Trump said the U.S. military had nearly accomplished its goals in Iran, but offered no clear timeline for ending the month-long war and vowed to bomb the country back into the "Stone Ages."


"There was nothing new in his speech. If he had declared the immediate end of the ⁠war, the ‌equity market could have surged," said Kazuaki Shimada, chief strategist at IwaiCosmo Securities.

"Instead, investors started selling stocks to book profits from ⁠the recent rally, as if they had expected this."

The index rallied this week on hopes for a de-escalation in the war, after logging its worst month since the 2008 global financial crisis in March.

The Nikkei rose to a 25-day average of around 54,258 earlier in the session, which Shimada said was a signal that the Nikkei had bottomed out.

Kazunori Tatebe, chief strategist at Daiwa ‌Asset Management, said the optimism that the war would not escalate weakened after Trump mentioned the possibility of attacking Iran's electricity generation and oil infrastructure.

The market seeks ⁠to know when the vital Strait of Hormuz will reopen to push the equities higher, he said.

Chip-making equipment maker Tokyo Electron fell 3.21% to drag the Nikkei down the most. Chip-testing equipment maker Advantest fell 6.11%.

Uniqlo brand owner Fast Retailing reversed early gains to end 1.04% lower.

All but three of the Tokyo Stock Exchange's 33 industry sub-indices fell. The shipping sector rose 1.9%.

Heavy machinery maker Mitsubishi Heavy Industries rose 2.64%.