Tokyo Stocks Rebound as Trump Signals Potential End to Middle East Conflict
Tokyo stocks experienced a significant rebound on Tuesday, March 10, 2026, with the Nikkei Stock Average climbing 2.88 percent to close at 54,248.39. The broader Topix index similarly saw gains, rising 2.47 percent to 3,664.28. This recovery follows a sharp sell-off on Monday, where the Nikkei recorded the third-largest point drop in its history.
Trump’s Comments Drive Market Optimism
The primary catalyst for Tuesday’s rally was comments made by U.S. President Donald Trump suggesting the Middle East war could end “very soon.” Despite earlier conflicting statements about the progress of U.S. Goals, Trump’s remarks fueled expectations of a swift resolution to the conflict. This, in turn, led to a pause in the recent spike in crude oil prices.
The U.S. Dollar weakened to the lower 157 yen range in Tokyo as demand for safety subsided with falling oil prices. At 5 p.m., the dollar fetched 157.31-33 yen.
Sector Performance and Market Dynamics
On the Prime Market, nonferrous metal, wholesale trade, and electric appliance issues led the gains. The Nikkei index surged over 1,900 points at one point, driven by a sharp drop in West Texas Intermediate crude oil futures. Dip-buying of recent decliners, particularly in the technology sector, also contributed to the market’s upward momentum.
However, analysts caution that the market has not fully recovered from Monday’s losses. Concerns remain regarding the ongoing attacks by Israel and the United States on Iran and the uncertainty surrounding a definitive end to the conflict.
Oil Price Impact and Industry Implications
The decline in crude oil prices is expected to benefit industries reliant on petroleum products, such as paint manufacturing. Lower crude prices could reduce input costs and ease pressure on profit margins for these companies. Asian Paints, Berger Paints, and Akzo Nobel all saw gains on Tuesday following the oil price drop.
The yield on the benchmark 10-year Japanese government bond ended down 0.005 percentage point at 2.180 percent, as concerns over inflation eased with the decline in oil prices.
Expert Perspectives
Toshikazu Horiuchi, equity strategist at IwaiCosmo Securities Co., attributed the market’s recovery to short-term players buying back shares following Trump’s comments. Maki Sawada, strategist at Nomura Securities Co., emphasized that the path toward an end to the conflict remains unclear despite the positive signals.
Frequently Asked Questions
Q: What caused the initial drop in Tokyo stocks on Monday?
A: The initial drop was caused by concerns over the escalating Middle East conflict and the potential for supply disruptions, leading to a surge in oil prices.
Q: How did Trump’s comments affect the market?
A: Trump’s suggestion that the war could end soon fueled optimism and led to a rebound in stock prices as investors anticipated a stabilization of oil prices.
Q: What sectors benefited from the market recovery?
A: Nonferrous metal, wholesale trade, and electric appliance issues were among the top-performing sectors.
Q: Is the market fully recovered from Monday’s losses?
A: No, while the market experienced a significant rebound, it has not yet returned to pre-Monday levels.
Q: What is the current outlook for the Japanese government bond yield?
A: The yield on the benchmark 10-year Japanese government bond ended down, indicating easing concerns over inflation.
Did you know? The Nikkei’s drop on Monday was the third-largest point drop in its history.
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