Mumbai, March 30 -- Japan's stock markets fell sharply on Monday, with the Nikkei 225 dropping 2.79% to 51,886 and the broader Topix Index losing 2.94% to 3,542. Shares also touched their lowest levels of the year earlier in the session, as investors reacted to rising tensions in the Middle East and a spike in oil prices.

The Iran conflict has now entered its fifth week with no clear end, as Iran-backed Houthi fighters in Yemen joined the fighting and the US sent more troops to the region. Japan is feeling the impact of higher energy costs and plans to release oil from its emergency reserves to ease the pressure.

At the same time, markets were weighed down by a sharply weaker yen and rising government bond yields, which increased expect...