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Japan Shares Fall on BOJ Tightening Bets Amid Hormuz Tensions

-- Japanese shares closed lower on Monday as expectations that the Bank of Japan could tighten policy to support the yen and curb inflation lifted sentiment, after comments from Japan's trade minister pointed to potential rate hikes to counter price pressures linked to the Iran war.

U.S. President Donald Trump ordered a blockade of the Strait of Hormuz, escalating tensions with Iran following the collapse of weekend peace talks.

The Nikkei 225 fell 0.74%, or 421.34 points, to close at 56,502.77.

Ryosei Akazawa, Japan's top trade negotiator at the Ministry of Economy, Trade and Industry, was responding to a proposal raised during a television programme that a stronger yen could help ease rising crude oil import costs.

Akazawa said such a policy direction could be considered as one option while assessing its impact on the broader economy, adding that the central bank's 2% inflation target was within reach even as real interest rates remained low.

On the corporate front, Renova (TYO:9519) shares rose 5% after it reported March electricity sales beat plan and jumped on year, with limited impact from output curtailment.

The Shikoku Bank (TYO:8387) shares gained 6% after it unveiled a three-year plan targeting higher profit and improved capital efficiency through digital transformation.

Sakura Internet (TYO:3778) shares climbed 7% after it secured a 3.8 billion yen generative AI infrastructure order expected to support earnings.

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Asia

Market Chatter: Malaysia Postpones Planned Carbon Tax Amid Middle East Worries

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Japan Equities Advance on Stronger Outlook, Export Growth

Japanese equities closed higher on Wednesday, with the Nikkei 225 gaining after J.P. Morgan raised its year-end target for the benchmark to 70,000 from 61,000, citing momentum in AI and a weaker yen.On Wednesday, the Nikkei 225 rose 0.4%, or 236.69 points, to close at 59,585.86.Analysts at J.P. Morgan said concerns about overheating in the Nikkei 225 outweigh improving long-term growth prospects for Japanese equities, even as crude prices stay elevated.The benchmark index climbed to a record on Wednesday, nearing the 60,000 mark, as it recovered from a broad global selloff linked to tensions in the Middle East.In economic news, Japan's trade surplus widened to 667 billion yen in March as exports grew faster than imports, with shipments to China and the U.S. offsetting a sharp slump in Middle East trade amid the Iran conflict, data from the Ministry of Finance Japan showed.The Bank of Japan said the financial system remains stable but flagged rising risks from geopolitical tensions, higher oil costs, and exposures to real estate, foreign funds and leveraged market activity.On the corporate front, Mitsubishi UFJ Financial (TYO:8306) fell over 1% after a report said it is considering offering higher deposit rates for a planned digital bank to compete on speed and cost.Tokyo Electric Power (TYO:9501) rose about 4% after securing 4.7 billion yen in fresh grants to support ongoing nuclear compensation payouts.Advantest Corporation (TYO:6857) gained around 3% after joining Applied Materials' EPIC platform and opening a Silicon Valley research center to advance chip development.

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