The Nikkei 225 Index declined 0.6% to around 66,500, while the broader Topix Index dropped 0.7% to 3,913 on Tuesday, as Japanese equities pulled back modestly from record highs amid ongoing geopolitical uncertainty.
Reports indicated that Tehran had suspended talks with Washington in response to Israeli strikes in Lebanon, although President Donald Trump stated that negotiations remain underway.
Domestically, markets are pricing in roughly a 78% probability that the Bank of Japan will raise interest rates again later this month as inflationary pressures linked to the Middle East conflict continue to build.
Among individual stocks, notable decliners included Taiyo Yuden (-4.6%), Fujikura (-2.5%), Furukawa Electric (-2.0%), Mitsubishi Heavy Industries (-4.8%), and Toyota Motor (-2.8%).
Meanwhile, SoftBank Group surged another 5%, extending gains after a technology-led rally on Wall Street sparked by the launch of a new PC chip.

Sumber : Trading Economics