The Nikkei 225 fell 0.22% to close at 38,403 on Friday, while the broader Topix Index dropped 0.75% to 2,771, extending losses from the previous session as accelerating inflation raised concerns about tighter monetary policy. Japan’s core inflation rate rose for the third consecutive month in May, reaching 3.7%—the highest level since January 2023—reinforcing expectations that the Bank of Japan may continue its policy normalization efforts.
Geopolitical tensions also weighed on sentiment, amid reports that US President Donald Trump is considering a potential strike on Iran, heightening market uncertainty. Major decliners included Sanrio (-1.4%), Toyota Motor (-0.9%), Mitsubishi Corp (-1.4%), Mitsubishi Heavy Industries (-2.6%), and Nintendo (-4.1%). Despite Friday’s pullback, both benchmarks ended the week in positive territory, with the Nikkei gaining 1.5% and the Topix rising 0.54%.
