Investor sentiment weakened as stalled US-Iran peace talks and ongoing tensions in the Middle East raised concerns about global stability. The continued disruption around the Strait of Hormuz, alongside US restrictions on Iranian ports, has kept energy prices elevated and added to inflation worries. Comments from Donald Trump that the current truce could remain in place indefinitely, while awaiting a new proposal from Iran, added to uncertainty.

In Japan, focus has shifted to the upcoming policy meeting of the Bank of Japan, as policymakers assess the economic impact of rising geopolitical risks.

Among individual stocks, notable declines were recorded in Disco Corp (-3.8%), Fujikura (-1.5%), Lasertec (-3.1%), Furukawa Electric (-3.5%), and JX Advanced Metals (-4.2%).