Japan's Nikkei Stock Average dropped sharply in morning trading on June 18, with the decline briefly topping 800 points as investors cut risk exposure amid uncertainty over the Middle East and signs that U.S.-Iran negotiations may have stalled. By 11:00 a.m., the Nikkei stood at 68,584.15, down 636.10 points from the previous close, while TOPIX was at 4,179.52, down 4.59 points. Higher U.S. crude oil futures rekindled inflation concerns and pushed up long-term interest rates, deepening worries that rising borrowing costs could squeeze corporate earnings. Weakness in major U.S. stock indexes from the previous session also weighed on sentiment. At the same time, demand tied to AI (artificial intelligence) supported some related shares, including SoftBank Group, tempering the market's decline. Market participants said a further deterioration in the Middle East could fuel a broader global equity sell-off through higher oil prices and renewed inflation, while strong expectations for AI-related earnings growth could encourage dip-buying on declines. Investors are now watching U.S.-Iran negotiations, crude oil futures and U.S. long-term interest rates for the next signals.