Japan Market falls on Mideast tensions, yen appreciation

The Japan share market declined on Wednesday, 08 January 2020, as risk aversion prevailed on tracking losses on Wall Street overnight and the yen's appreciation against greenback amid rising geopolitical concerns in the Middle East after Iran fired a series of missiles at an Iraqi airbase that hosts American troops. Around late afternoon, the 225-issue Nikkei Stock Average declined 345.15 points, or 1.46%, to 23,230.57, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange sank 23.57 points, or 1.37%, at 1,701.48.

Total 32 issues of the 33 industry category of Topix index dived into negative territory, with Marine Transportation, Glass & Ceramics Products, Precision Instruments, Real Estate, Chemicals, and Machinery issues being notable losers.

Equity investors have been jittery since late last week amid uncertainty about the impact of rising tensions between the U.S. and Iran following the U.S. airstrike that killed top Iranian military commander Qasem Soleimani.

Iran had fired several rockets at two joint U.S.-Iraqi bases early Wednesday morning in retaliation for the killing of a top Iranian military leader. Tehran has promised to retaliate for a U.S. airstrike that killed Iran's top military commander last week.

President Trump said the U.S. remains prepared to attack if Iran retaliates against America, but walked back a threat to target the country's cultural sites, while speaking at a White House press briefing Tuesday afternoon. U.S. Defense Secretary Mark Esper on Tuesday said he expects retaliation by Iran in some way, adding that the U.S. isn't seeking war with the Islamic Republic but would be prepared to finish one.

The major exporters were lower on a stronger yen. Panasonic and Mitsubishi Electric lost more than 2% each, Sony fell more than 1% and Canon was lower by more than 1%. Among auto stocks, Honda Motor fell almost 3% and Toyota shed more than 2%.

Marine transportation issues took a hit from fears that heightened tensions in the Middle East will push up fuel prices. Kawasaki Kisen collapsed 6%, Mitsui O.S.K. Lines tumbled 4%, and Nippon Yusen was down 3%.

Japan Petroleum was higher by more than 3% and Inpex rose almost 2% after crude oil prices gained more than 3% in Asian trading amid escalating tensions in the Middle East.

CURRENCY NEWS: The Japanese yen, often viewed as a safe-haven currency in times of economic uncertainty, appreciated against greenback and other major currencies, as Middle East tensions escalated after Iran fired missiles at Iraqi bases that host U.S. troops. The dollar fetched 108.01-02 yen, compared with 108.41-51 in New York yen and 108.32-34 yen in Tokyo on Tuesday.

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