Tokyo Stocks Slip Again as Middle East Tensions Weigh on Nikkei

Tokyo stocks remained under pressure in the afternoon session on Wednesday, with the Nikkei average continuing its decline, according to 日本経済新聞. Shares of Fujikura and Sumitomo Metal Mining extended their losses during the trading day.

The Nikkei closed the day down 1,889 points, or roughly 2.9%, at 64,325, marking its third consecutive daily decline, as reported by the stock market news site Kabutan. The benchmark index at one point fell by more than 1,900 points, according to TV Asahi News.

The sell-off was broad-based, with the market described as being in a "triple decline" state, per TV Asahi. Jiji Press characterized the drop as a sharp continued fall, noting that the weakness was centered on AI-related stocks amid worsening conditions in the Middle East.

Rising crude oil futures prices added to the negative sentiment, according to NHK News. The combination of geopolitical concerns and higher energy costs weighed heavily on investor confidence throughout the session.

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The declines were not limited to a single sector, as the market saw widespread selling pressure. The reports indicate that the Middle East situation has become a key driver of risk aversion among traders, prompting them to reduce exposure to equities.

Looking ahead, market participants will likely keep a close watch on developments in the Middle East and their potential impact on oil prices, as well as any signs of stabilization in AI-related shares that have led the recent downturn.