The Nikkei index fell 0.83 percent, closing at 30,999.55 points. It had earlier fallen to a two-week low of 30,974.26 points before a quick rebound in the last two minutes of the session.
Among the 225 stocks listed on the Nikkei index, the shares of 175 companies declined and 48 shares rose, while the shares of two companies witnessed no significant change.
The index’s volatility measure rose to 23.87, a level not seen since last October 28.
The broader Topix index fell 0.75 percent at the close.
Maki Sawada, a strategist at Nomura Securities, said: “Concerns about the possibility of escalating tensions in the Middle East will continue to represent a burden on the Japanese stock market.”
Fears increased that the war between Israel and Hamas in the Gaza Strip would turn into a broader conflict in the Middle East at the weekend, with Washington warning of a major threat to American interests in the region and announcing the deployment of advanced air defense systems.
But continued diplomatic efforts succeeded in bringing aid convoys into Gaza, while Hamas’ release of two American detainees raised hopes for the release of others.
Pacific Metals stock was the biggest percentage loser, falling 4.83 percent. Oil refining company Ineos shares fell 3.01 percent.
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