Japanese stocks fell for a second consecutive trading day. Surging global bond yields and rising international crude oil prices, which fueled concerns about inflation and tightening, were the main factors dragging down market sentiment today.

The Nikkei 225 ended down 0.60%, or 396.35 points, at 65,481.27. During the session, it plunged as deep as 64,699.49 at one point under multiple pressures.

The Topix fell more sharply, closing down 1.72% at 4,041.13. Overnight losses on Wall Street set a downward tone for Japanese stocks.

With Japanese government bond yields hovering near multi-decade highs, expectations of rising borrowing costs directly pressured equity valuations.

Wataru Akiyama, equity strategist at Nomura Securities, noted that against the backdrop of rising interest rates, AI-related stocks that had previously led the Japanese market's rally are now facing scrutiny over "overvaluation."

However, in the afternoon, some semiconductor equipment and related sector stocks rebounded, with Disco and Screen Holdings closing up more than 4%, helping the Nikkei recover some of its losses.

Energy market uncertainty surrounding Iran has persisted for seven months, keeping oil prices elevated and further intensifying inflation concerns in Japan, a market heavily dependent on energy imports.