Japan's Nikkei logs worst week in over a month on Middle East uncertainty
EWJ•Nikkei posts its worst week since mid-July
TOKYO, Aug. 21 (Reuters) - Japan's Nikkei share average logged its worst week in more than a month on Friday, as uncertainty surrounding the Middle East conflict drove oil prices higher and fanned inflation concerns.
The Nikkei .N225 closed 0.3% lower at 66,016.36, with the index losing roughly 4% this week, the biggest since the week ended July 17.
The broader Topix .TOPX edged 0.2% higher in the latest session, but still lost 3.1% for the week, its worst showing since early March.
Oil, yields and transport shares move on Middle East risks
The U.S. will impose "the toughest sanctions in history" on Iran, Treasury Secretary Scott Bessent said on Thursday, as Washington ramped up economic threats in a bid to end the nearly six-month-old war. Crude oil jumped about $2 overnight. O/R
Japan sources about 95% of its oil imports from the Middle East, with roughly 70% of supplies passing through the Strait of Hormuz.
Inflation concerns lifted Japanese bond yields, with the 10-year government note's yield JP10YTN=JBTC rising 3 basis points to 2.875% on Friday. Yields rise when bond prices fall. JP/
"Profit-taking is likely heading into the weekend with oil prices and bond yields elevated amid the uncertain situation in the Middle East," said Maki Sawada, a strategist at Nomura Securities.
Shares of heavily weighted Uniqlo operator Fast Retailing 9983.T tumbled 3.6%, making it one of the biggest drags in the Nikkei.
AI-focused startup investor SoftBank Group 9984.T fell 2.5%.
Despite the index's decline, gainers outnumbered losers in the Nikkei, with 135 of its 225 constituents advancing, 86 declining and four closing unchanged.
Shipping .ISHIP.T was the top performer among the Tokyo Stock Exchange's 33 industry groups, rallying 4.9% on expectations for higher freight rates, with the crucial Strait of Hormuz shipping route remaining effectively closed.
