Tokyo: Nikkei down nearly 2% on first trading day of 2020

[TOKYO] Tokyo's benchmark Nikkei index plunged nearly 2 per cent on Monday, its first trading day of 2020, in line with the risk aversion across global markets after the US killing of a top Iranian general.

The Nikkei 225 index - which gained more than 18 per cent in 2019 - lost 1.91 per cent, or 451.76 points, to close at 23,204.86, while the broader Topix index was down 1.39 per cent, or 23.87 points, at 1,697.49.

The US killed Iranian military mastermind Qasem Soleimani in a strike in Baghdad last week, boosting oil prices as it fanned fresh fears of conflict in the Middle East.

"Geopolitical tensions look like remaining elevated in coming days, lending support to oil prices and keeping risk asset markets on the defensive," National Australia Bank strategist Ray Attrill said in a note.

The yen soared as the Japanese currency drew safe-haven buying, a negative development for Japanese exporters.

"The strong yen also weighed on the market," said Shinichi Yamamoto, a broker at Okasan Securities in Tokyo.

The dollar was trading at 108.04 yen in Asian afternoon trade, down from 108.11 in New York on Friday and rates above 109 when Tokyo closed for 2019.

"But the impact of the geopolitical tensions on the market may be limited," Mr Yamamoto told AFP.

"The market's real focus is still on the US-China trade war and the US presidential election this year," he added.

In individual stocks trade in Tokyo, Nissan lost 1.66 per cent to 625.5 yen after former chief Carlos Ghosn fled Japan before his trial on charges of financial misconduct.

Othercarmakers also fell on a strong yen, with Toyota down 1.93 per cent at 7,565 yen.

Nintendo dropped 2.79 per cent to 42,740 yen while major shipping company Nippon Yusen tumbled 2.87 per cent to 1,924 yen.

Petroleum explorer Inpex surged 4.09 per cent to 1,183 yen on higher oil prices.

AFP