The Nikkei 225 Index dropped 2.85% to close at 64,325 on Wednesday, hitting four-week lows as surging global bond yields and oil prices weighed heavily on equities. Oil prices climbed for a third consecutive session amid escalating hostilities between the US and Iran, heightening inflationary risks and pushing global bond yields higher. Japan’s 10-year government bond yield reached 3% for the first time since 1996, also supported by growing expectations for a Bank of Japan interest rate hike. Governor Kazuo Ueda said this week that policymakers need to pay greater attention to upside price risks when conducting monetary policy, signaling that a rate increase is likely later this month. Tech and AI-related stocks led the decline, with notable losses from Advantest (-2.5%), Fujikura (-3.9%), Taiyo Yuden (-4.6%), Tokyo Electron (-3.4%) and SoftBank Group (-6.4%). Financial, consumer and industrial stocks also recorded sharp declines.