Japanese equities declined on Thursday, mirroring losses on Wall Street, following contradictory statements from the US and Iran regarding potential negotiations to end the ongoing conflict.
The Nikkei 225 slipped 228.7 points or 0.4% to open at 64,770.76.
White House officials dismissed an Iranian media report suggesting peace talks were making progress, while President Donald Trump stated he was "not satisfied" with the discussions, dampening hopes for a quick resolution, according to various reports.
The US also rejected claims of a draft interim deal that would have restored normal traffic through the Strait of Hormuz within a month, with Trump insisting that no single country should control the vital waterway.
Meanwhile, Federal Reserve Vice Chair Philip Jefferson, in a prepared speech delivered at a Bank of Japan conference in Tokyo, predicted inflation would ease later this year as tariff effects and elevated energy costs diminish, though he cautioned that upside inflationary risks persist, Bloomberg News reported on Thursday.
Jefferson also said he is closely monitoring whether higher energy prices stemming from the Iran war are beginning to weigh on economic activity.