Japan's Nikkei 225 Drops 0.22% After Hokkaido Earthquake

On Sunday, June 22, a magnitude 6.0 earthquake struck near the coastline of Hokkaido, Japan, at a depth of 10 kilometers. The German Research Centre for Geosciences confirmed the quake, which occurred amidst heightened geopolitical tensions in the region. Fortunately, there were no immediate reports of a tsunami, providing some relief to the affected areas.

Japan's stock market reacted swiftly to the earthquake, with the Nikkei 225 index falling 0.22% to close at 38,403.23. The broader Topix index also dropped 0.75% to close at 2,771.26. Utility and infrastructure companies were among the hardest hit, as investors expressed concerns over potential supply disruptions and safety inspections in the aftermath of the quake.

In addition to the earthquake, Japan's core inflation rate reached a 16-month high of 3.7% in May, surpassing the 3.6% forecast by experts. This increase was primarily driven by rising prices in services and electricity. Analysts suggested that the elevated inflation rate could delay any changes to interest rates, as the Bank of Japan remains cautious due to the weak yen. The market responded to this news with mixed reactions, with real estate and retail stocks trading unevenly, while banks and other financial companies remained weak.

Geopolitical tensions in the Middle East also contributed to investor caution. U.S. President Donald Trump is reviewing plans to support Israel following reported attacks on Iranian nuclear sites. This development has led many airlines to avoid Iranian airspace due to safety concerns, impacting trade and shipping routes. Despite these tensions, India's markets saw gains, with the Nifty 50 and Sensex both rising more than 1% in intraday trade, driven by strong local buying in energy and auto stocks.