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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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