The Nikkei 225 Index plunged 3.61% to close at 54,245, while the broader Topix Index tumbled 3.67% to 3,634 on Wednesday, marking a third straight session of losses as the escalating war in the Middle East triggered widespread selling across the region. The conflict expanded after Israel struck targets in Lebanon, while Iran intensified missile and drone attacks on Israel, Saudi Arabia, the UAE, Oman, and Bahrain. Heightened concerns about the war’s impact on energy prices, inflation, and interest rate expectations further unsettled investors. Meanwhile, Bank of Japan Governor Kazuo Ueda warned that the Middle East conflict could significantly affect Japan’s economy, signaling the central bank is likely to keep rates steady for an extended period. Declines were broad-based, led by index heavyweights including Fujikura (-7.2%), JX Advanced Metals (-9.3%), SoftBank Group (-7.2%), Sumitomo Mitsui (-6.5%), and Toyota Motor (-4.9%).