Nikkei Falls More Than 2% After Iran and United States Exchange Fire

Japan’s Nikkei fell more than 2% at Monday’s open after Iran and the United States exchanged attacks in the Middle East for the first time in more than a month.

About 15 minutes into the session, the Nikkei 225 had lost 2.06%, or 1,367.03 points, to 65,038.53. The broader Topix index fell 1%, or 41.39 points, to 4,105.32.

Iran’s Revolutionary Guard said it had attacked two U.S. bases in Jordan early Monday in retaliation for a Washington bombing of Iran’s Larak Island hours earlier. The escalation unsettled investors, while expectations of further U.S. Federal Reserve rate increases to contain inflation added pressure to Japanese shares.

Semiconductor and artificial-intelligence-related companies suffered some of the sharpest declines. Memory-chip maker Kioxia fell more than 1.8%, SoftBank dropped about 4.5%, Advantest lost 8.4%, and Tokyo Electron declined 3.4%.

The market’s moves were mixed elsewhere. Toyota rose more than 2%, while Honda and Nissan gained 0.7% and 1.6%, respectively. Mitsubishi UFJ Financial Group fell 1.2%, while Sony gained 0.8%.