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Tokyo: Stocks close lower on geopolitical worries

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[TOKYO] Tokyo stocks closed lower on Wednesday, extending falls on Wall Street as investors fled to safe haven assets amid US-Iran tensions and ahead of the G-20 summit this week.

The benchmark Nikkei 225 index was down 0.51 per cent, or 107.22 points, to end at 21,086.59, while the broader Topix index lost 0.59 per cent, or 9.15 points, at 1,534.34.

"Uncertainties over the environment outside Japan have not been wiped out, although the dollar-yen became steady" in afternoon trade, Yoshihiro Ito, chief strategist at Okasan Online Securities, said in a commentary.

Iran said on Tuesday it will further reduce its commitment to a 2015 nuclear deal, in defiance of new American sanctions as US President Donald Trump warned the Islamic republic of "overwhelming" retaliation to any attack.

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Tensions between Iran and the US have spiralled since last year when Mr Trump withdrew the United States from the deal under which Teheran was to curb its nuclear programme in exchange for relief from economic sanctions.

The two arch-rivals have been locked in an escalating war of words since Iran shot down a US surveillance drone in what it said was its airspace, a claim the US vehemently denies.

Investors are looking ahead to a planned meeting at the Group of 20 later this week between Mr Trump and Chinese leader Xi Jinping, hoping for signs of progress in resolving the two countries' trade war.

The dollar remained low against the safe haven yen.

The greenback changed hands at 107.36 yen in Asian trade, little changed from the level in New York late on Tuesday and slightly up from 106.99 yen on Tuesday afternoon Tokyo time.

In Tokyo, airlines were among losers, with ANA Holdings falling 0.11 per cent to 3,541 yen and Japan Airlines 0.34 per cent to 3,431 yen.

Carmakers were also lower, with Honda sliding 1.24 per cent to 2,731 yen, Toyota 0.57 per cent to 6,613 yen and Nissan 0.40 per cent to 761.2 yen.

Mitsubishi Heavy Industries lost 1.80 per cent to 4,720 yen after Canadian aerospace firm Bombardier said it is effectively exiting the commercial airline manufacturing sector with the sale of its CRJ Series regional jet programme to the Japanese firm for US$550 million.

AFP