Japan's stock market edged lower on Tuesday, with the Nikkei 225 falling 0.09% to close at 53,700, reversing earlier gains as investor sentiment weakened later in the session.
The decline came as oil prices moved higher due to fears of supply disruptions in the Middle East. Iran has increased attacks on key energy infrastructure, raising concerns about the stability of global oil supply.
At the same time, many countries have yet to support Donald Trump's call to protect commercial shipping routes in the Strait of Hormuz, adding to uncertainty in global markets.
Rising oil prices have also sparked inflation worries, especially for import-dependent economies like Japan, which are more exposed to energy supply shocks.
Meanwhile, the Bank of Japan is widely expected to keep interest rates unchanged this week as it assesses the potential economic impact of the ongoing tensions.
Technology stocks led the losses, with several major names posting notable declines during the session.
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