[Nikkei Recap] Sept 2, 2026: Nikkei 225 Sinks 1,889 Points to 64,325 as Iran Strikes Send Oil and Rates Higher

Hey everyone, Hirokichi here.

Tokyo stocks had a rough day today, September 2. The Nikkei 225 closed at 64,325.64 yen, down 1,889.70 points, or 2.85%, from the previous day. More than 90% of stocks on the Tokyo Stock Exchange Prime Market fell, and all 33 industry sectors ended in the red — a genuinely broad-based sell-off. The trigger was a U.S. military strike on Iran and the surge in oil prices and interest rates that followed. Let’s go through what happened, why the drop was this big, and what it means for us as individual investors.

Today’s index moves

Here’s a quick look at the closing levels for the major indexes.

Both the Nikkei and TOPIX fell close to 3%, showing that big, heavily-traded blue chips took the brunt of the selling. The Growth 250 index, by contrast, fell less than 1% — so this was mainly a large-cap sell-off. Note: an official 4pm JST closing print for USD/JPY wasn’t confirmed by the time of writing, so I’m using the afternoon level reported in the press (around 159.91 yen) as a reference point. More on that below.

Trading value on the TSE Prime Market came to roughly 8.03 trillion yen, with volume around 2.42 billion shares — both well above the usual pace, which tells you how active the selling was (source: Zaikei Shimbun).

For a recap of the previous session (September 1), see yesterday’s Nikkei recap.

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Why did it move? The three things driving the market

Three factors combined to push the market down today.

(1) A U.S. strike on Iranian Revolutionary Guard targets
On September 1 local time, U.S. Central Command announced it had carried out airstrikes on Islamic Revolutionary Guard Corps (IRGC) facilities in Iran. Fears of further escalation sent oil futures sharply higher — WTI crude closed up 5.20% at $90.22 a barrel, its highest level in about a month, since late July (sources: Reuters, Zaikei Shimbun).

(2) Rising U.S. long-term interest rates
The jump in oil prices raised concerns about inflation, and the U.S. 10-year Treasury yield climbed to around 4.80%, its highest level in about a year and eight months. Higher rates make growth stocks — especially tech and semiconductor names whose value depends heavily on future profits — look more expensive by comparison. That’s exactly what played out on Wall Street the previous day (September 1), where the Dow fell 419.02 points (-0.78%) to 52,766.88, the Nasdaq Composite dropped 271.12 points (-1.03%) to 26,099.77, and the S&P 500 fell 0.71% to 7,631.47. That selling carried straight through to Tokyo.

(3) Domestic factors: fiscal and rate speculation
On top of oil and U.S. rates, uncertainty over Japan’s own fiscal management triggered some selling of Japanese government bonds, and the yen weakened toward 160.39 against the dollar in the morning session — a “sell Japan” type move. In the afternoon, though, a policy official suggested that “options other than a 0.25-point rate move” were on the table, and the dollar pulled back to around 159.91 yen. For stocks, the combination of higher oil and higher rates was enough to push selling across nearly every sector.

Today’s most-talked-about stocks — and why they moved

Let’s look beyond the index numbers at some of the individual names that got attention today.

This table shows a clear theme: today’s market split along one line — “rising rates.” Semiconductor and AI-related names were sold hard, while bank stocks, which tend to benefit from higher rates, held up comparatively well.

SoftBank Group (9984): the AI-rally poster child takes a hit

SoftBank Group closed down 256 yen at around 5,001 yen, a drop of 4.87%. The company has become something of a symbol of the AI investment boom and has helped drive the market’s bullish mood for a while now. That makes it an easy target for “maybe this ran up too far” selling whenever rates rise, and it tends to fall harder than average on broad down days like today.

Advantest (6857): profit-taking hits the AI rally’s leader

Advantest, the world’s top maker of semiconductor test equipment, fell to 33,050 yen, down 6.3% — one of the sharpest declines among large-cap names today. The stock has rallied hard this year on booming AI chip demand, which made it a natural candidate for profit-taking once rates and geopolitical risk both spiked. There wasn’t a specific company-level news item behind the move — it looks driven mainly by broader market positioning.

Tokyo Electron (8035): sympathy selling from U.S. tech weakness

Tokyo Electron, Japan’s largest chip equipment maker, fell 1,850 yen to 54,380 yen, down 3.3%. This was largely sympathy selling tied to the prior day’s U.S. tech sell-off, rather than anything company-specific — much like Advantest, it got grouped in with “rate-sensitive tech” and sold accordingly.

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Mitsubishi UFJ Financial Group (8306): rate story offers some support

By contrast, megabank Mitsubishi UFJ Financial Group traded in a narrow range around its previous close of 3,680 yen. Bank stocks tend to benefit from rising rates because it widens the spread between what banks pay depositors and earn on loans, which helped this stock hold up better than the broader market. Note: I wasn’t able to confirm the official September 2 closing price at the time of writing, so I’ve marked it “to be confirmed” and will update it before this goes live.

What this means if you’re an individual investor

A drop like today’s can be unsettling, especially if you’re watching short-term price moves closely. But it’s worth remembering this wasn’t triggered by weak earnings at any specific company — it’s a chain reaction that started with geopolitical risk, moved through oil prices, and ended with higher interest rates. If you’re dollar-cost averaging into index funds, days like this actually mean you’re buying more units for the same amount of money.

If you’re a short-term trader, though, it’s probably worth being a bit more careful than usual about position sizing and stop-loss levels, since oil and rate headlines could keep driving volatility. Either way, I think the important thing is not to panic-trade off a scary headline, but to go back to your own investment plan and stick with it.

What to watch from here

Here are three things I’ll be watching going forward.

(1) How the Iran situation develops
Whether tensions ease or the conflict escalates further will have a big impact on where oil prices go next.

(2) The level of U.S. long-term rates
Whether the 10-year yield holds around 4.80% or starts to come back down will be key for whether tech and semiconductor stocks can recover.

(3) Domestic fiscal and monetary policy speculation
The yen has been swinging between the 159 and 160 level against the dollar, and it’s clearly sensitive to any comment from policymakers. Worth keeping an eye on statements from the Bank of Japan and the Ministry of Finance.

Let’s keep at it, slow and steady. See you tomorrow!

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* This article is for informational purposes only and does not recommend any specific investment. Please make investment decisions at your own responsibility.

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