Why Nikkei 225 (JP225) fell 2.02% on August 3, 2026

Nikkei 225 (JP225) fell 2.02% on August 3, 2026 — War risk & weaker rupee pressure EM equities.

The Nikkei 225 sank 1.6% as U.S.-Iran geopolitical tension — and the broader risk-aversion tone around potential war escalation and oil-price spikes — pressured regional equities and sentiment across Japan and Asia.

Higher oil prices from war risk and risk-off rotation weighed on equity valuations; Japanese exporters face margin pressure from elevated energy costs, and the yen's strength (often a risk-off signal) amplified the…

The Japan (Yen & Equities) theme reflects the Nikkei's sensitivity to geopolitical shocks and oil volatility — as U.S.-Iran tensions spiked and broader safe-haven demand returned, the yen strength and equity weakness…

If the U.S.-Iran conflict de-escalates sharply and oil retreats, risk appetite will return and the Nikkei will recover; sustained tensions and higher crude could extend the selloff.