Tokyo: Stocks start new year lower on US-Iran tensions

[TOKYO] Tokyo stocks started the new year sharply lower on Monday, playing catch-up with global risk aversion after the US killing of a top Iranian general.

The benchmark Nikkei 225 index fell 1.67 per cent or 394.71 points to 23,261.91 in early trade, while the broader Topix index was down 1.31 per cent or 22.62 points at 1,698.74.

The United States killed the Iranian military mastermind Qasem Soleimani in a strike in Baghdad, boosting oil prices as it fanned fresh fears of conflict in the crude-rich Middle East.

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

"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 dollar was trading at 107.95 yen early Monday, down from 108.11 in New York on Friday and rates above 109 when Tokyo closed for 2019.

US Secretary of State Mike Pompeo said Sunday that Iran will probably try to attack American troops after a US strike killed a top Iranian commander.

But he warned "it would be a big mistake for Iran to go after them".

In individual stocks trade in Tokyo, Nissan lost 2.37 per cent to 621 yen after former chief Carlos Ghosn fled Japan before trial opens on charges of financial misconducts.

Other automakers also fell on a strong yen, with Toyota down 1.94 per cent at 7,564 yen.

Nintendo dropped 2.31 per cent to 42,950 yen while petroleum explorer Inpex rose 2.11 per cent to 1,160.5 yen on higher oil prices.

Major shipping company Nippon Yusen tumbled 2.82 per cent to 1,925 yen.

AFP