The Nikkei 225 Index fell 1% to around 56,900 while the broader Topix Index slid 1.2% to 3,805 on Friday, breaking a two-day rally, with tech and bank stocks leading the retreat. Global risk appetite weakened amid escalating tensions between the US and Iran, with the US military increasing its presence in the Middle East as Trump weighs potential military action to pressure Tehran at the negotiating table. Investors also grew cautious ahead of key US economic releases that could shape expectations for Fed policy, particularly after minutes showed some officials were open to raising rates further if inflation remains persistent. Domestically, data indicated that Japan’s headline and core inflation slowed in January, reflecting government measures to ease cost-of-living pressures. Declines among major tech and bank shares were led by Tokyo Electron (-3.5%), SoftBank Group (-3.3%), and Mitsubishi UFJ (-2.2%). Both benchmark indexes were on track to finish the week largely unchanged.