{"id":63761,"date":"2026-06-25T20:38:17","date_gmt":"2026-06-26T00:38:17","guid":{"rendered":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/nikkei-plunges-3-as-tokyo-inflation-fuels-rate-hike-fears-south-korea-expands-drone-forces\/63761\/"},"modified":"2026-06-25T20:38:17","modified_gmt":"2026-06-26T00:38:17","slug":"nikkei-plunges-3-as-tokyo-inflation-fuels-rate-hike-fears-south-korea-expands-drone-forces","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/nikkei-plunges-3-as-tokyo-inflation-fuels-rate-hike-fears-south-korea-expands-drone-forces\/63761\/","title":{"rendered":"Nikkei Plunges 3% as Tokyo Inflation Fuels Rate Hike Fears; South Korea Expands Drone Forces"},"content":{"rendered":"<h2>Key Takeaways<\/h2>\n<ul>\n<li><strong>Japan\u2019s Nikkei 225 (<a href=\"\/stock\/NI225\">NI225<\/a>) plummeted 3% to 70,658.98<\/strong> as rising Tokyo inflation data reinforced expectations for further <strong>Bank of Japan (BoJ)<\/strong> interest rate hikes.<\/li>\n<li><strong>SoftBank Group (<a href=\"\/stock\/9984\">9984<\/a>) shares dove 10%<\/strong> in early Friday trading, leading a broader sell-off in technology and AI-related stocks following volatile U.S. sessions.<\/li>\n<li><strong>South Korea\u2019s Ministry of National Defense<\/strong> announced an ambitious plan to train <strong>500,000 drone operators<\/strong>, effectively preparing every conscript for unmanned warfare.<\/li>\n<li><strong>Eight additional vessels exited the Strait of Hormuz<\/strong>, according to South Korea\u2019s Oceans Ministry, as maritime traffic begins to normalize following a regional ceasefire.<\/li>\n<li><strong>The UK\u2019s National Energy System Operator (NESO)<\/strong> issued a warning regarding <strong>tight electricity supply margins<\/strong> for Friday evening\u2019s peak demand due to extreme heat and low wind.<\/li>\n<\/ul>\n<h2>Tokyo Inflation Accelerates, Pressuring Markets<\/h2>\n<p>Tokyo\u2019s core consumer price index (CPI) rose <strong>1.6% in June<\/strong>, accelerating from 1.3% in May and matching market forecasts. This uptick in price pressure, largely driven by energy costs and the ongoing Middle East conflict, has kept the <strong>Bank of Japan<\/strong> on a path toward further policy normalization.<\/p>\n<p>The benchmark <strong>Nikkei 225 (<a href=\"\/stock\/NI225\">NI225<\/a>)<\/strong> responded sharply to the data, sliding <strong>3%<\/strong> to extend recent losses. Investors are increasingly pricing in another rate hike by the BoJ later this year, potentially as early as October, as underlying inflation approaches the central bank&#39;s <strong>2% target<\/strong>.<\/p>\n<h2>Tech Sector Hit as SoftBank Tumbles<\/h2>\n<p><strong>SoftBank Group (<a href=\"\/stock\/9984\">9984<\/a>)<\/strong> saw its shares crash <strong>10%<\/strong> in early Friday trading, mirroring a global retreat from high-valuation technology stocks. The decline comes amid reports of stalled negotiations for a <strong>$6 billion margin loan<\/strong> secured by its stake in OpenAI, adding to balance sheet concerns.<\/p>\n<p>The broader Asia-Pacific region traded mostly lower, tracking a volatile U.S. session. South Korea\u2019s <strong>KOSPI<\/strong> declined <strong>2%<\/strong> at the open, while Australia\u2019s <strong>S&amp;P\/ASX 200<\/strong> managed a slight gain of <strong>0.2%<\/strong> to 8,765.80, supported by a rebound in <a href=\"https:\/\/stockmarketwatch.com\/energy\/crude-oil\" data-internallinksmanager029f6b8e52c=\"12\" title=\"Crude oil\">oil prices<\/a>.<\/p>\n<h2>South Korea\u2019s &quot;500,000 Drone Warriors&quot; Initiative<\/h2>\n<p>In a major shift toward modern warfare, South Korea&#39;s Defence Ministry confirmed plans to train <strong>500,000 drone operators<\/strong>. The program aims to provide every conscript with drone piloting credentials during their mandatory military service, with the ministry procuring <strong>11,000 commercial drones<\/strong> for training in 2026.<\/p>\n<p>Defence Minister <strong>Ahn Gyu-back<\/strong> emphasized that the rapid expansion of drone and anti-drone forces is essential for &quot;self-reliant security.&quot; The initiative also seeks to bolster the domestic drone industry by requiring equipment to be built with <strong>locally produced core components<\/strong>.<\/p>\n<h2>Global Energy and Maritime Updates<\/h2>\n<p>In the United Kingdom, the <strong>National Energy System Operator (NESO)<\/strong> warned of tight electricity margins for Friday evening. The combination of <strong>record-breaking temperatures<\/strong> driving air conditioning demand and <strong>low wind generation<\/strong> has forced the operator to seek additional capacity from generators.<\/p>\n<p>Meanwhile, the maritime crisis in the Middle East showed signs of further easing. South Korea\u2019s Oceans Ministry reported that <strong>eight more vessels<\/strong> have exited the <strong>Strait of Hormuz<\/strong> following a recent U.S.-Iran ceasefire agreement. This brings the total number of South Korean-linked ships remaining in the Persian Gulf down to <strong>13<\/strong>, as traffic through the strategic chokepoint gradually resumes.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways Japan\u2019s Nikkei 225 (NI225) plummeted 3% to 70,658.98 as rising Tokyo inflation data reinforced expectations for further Bank 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