(Bloomberg) -- Foreigners turned net sellers of Japanese stocks for the first time in 2026 last week amid growing worries that higher oil prices will hit the nation’s economy.

Overseas investors net sold roughly ¥491 billion ($3.1 billion) of Japanese cash equities in the week ending March 13, the largest amount since September, according to data from Japan Exchange Group Inc. The selloff marks the end of a nine-week buying streak that had been largely driven by optimism for Prime Minister Sanae Takaichi’s fiscal expansionary policies.

Most Read from Bloomberg

Trump Signs Order to Launch Vance-Led Anti-Fraud Task Force

Russian Oil Bound for China Is Diverted as India Grabs More

US Carrier Involved in Iran Fight Heads Back to Port After Fire

Trump Seeks De-Escalation After Iran, Israel Strike Gas Hubs

Europe Stands Up to Donald Trump Threats Over Iran War Support

Concerns that climbing oil prices due to the Iran war will fuel inflation and weigh on corporate earnings have dimmed the shine of Japanese stocks. Japan relies on the Middle East for more than 90% of its oil imports and its industrial supply chain heavily depends on naphtha from the region.

“Many investors think that Japan is one of the most negatively-affected countries by rising oil prices,” said Naoya Oshikubo, chief market economist at Mitsubishi UFJ Trust & Banking Corp. “That’s why Japanese equities are underperforming.”

The Nikkei had rallied 17% in the first two months of 2026 but has lost 9.3% since the Iran conflict broke out, compared with a 3.7% decline for the S&P 500.

The Bank of Japan added the Middle East to its list of risk factors on Thursday as it announced it was standing pat on interest rates. Governor Kazuo Ueda said he expects rising oil prices to put upward pressure on prices in Japan.

Jitters ahead of Takaichi’s summit with Donald Trump, scheduled for Thursday in Washington, have amplified investor caution in recent days, Mitsubishi UFJ’s Oshikubo said. “Investors are wary of tough negotiations with Trump over his order to send ships to the Middle East,” he said.

The Nikkei 225 closed down 3.4% in Tokyo on Thursday while the broader Topix fell 2.9%.

Most Read from Bloomberg Businessweek

American Retirees Want to Leave the Country. Italy and Costa Rica Are Happy to Have Them

We Kinda Messed Up Our Retirement

People Are Using Claude to Do Their Taxes (But Maybe They Shouldn’t)

The Rise and Fall of Peter Attia’s Longevity Empire

Small Businesses Are Pushing Back Against Private Equity

©2026 Bloomberg L.P.