Japan’s Nikkei share average fell 0.3% by Friday’s midday recess in Tokyo and was headed for a weekly decline of about 4%, its steepest since the week ended July 17. The broader Topix was down 0.1% and on track for a 3.4% weekly loss. Middle East tensions pushed crude oil about $2 a barrel higher overnight after US Treasury Secretary Scott Bessent said Washington would impose "the toughest sanctions in history" on Iran, increasing concerns that prolonged energy costs will keep inflation elevated. Japan’s 10-year government bond yield rose 3 basis points to 2.875%. Fast Retailing fell 4% and SoftBank Group declined 1.3%, while shipping stocks rallied 2.8% as the Strait of Hormuz remained effectively closed and investors anticipated higher freight rates. The weakness followed broad losses on Wall Street, where the Dow fell 1.2%, the S&P 500 dropped 0.7% and the Nasdaq declined 1.0%. US long-term bond yields also rose despite Treasury plans to at least double sovereign bond buybacks. Investors are turning to next week’s Jackson Hole gathering for signals on interest rates from the Federal Reserve’s new leadership.