Japanese shares tumble after Iran attacks U.S. forces in Iraq

  • Reuters
  • Stock Market News
Japanese shares tumble after Iran attacks U.S. forces in Iraq
Credit: © Reuters.

By Stanley White

TOKYO, Jan 8 (Reuters) - Japanese shares tumbled on Wednesday by the most in almost a year after Iran launched missile attacks on U.S. forces in Iraq, increasing the risk of a broader conflict in the Middle East ensnaring the United States and its allies.

At 0120 GMT the Nikkei index was down 2.34% at 23,024.98, on course for its biggest one-day percentage decline since March 2019. The index broke below the psychologically important 23,000 mark for the first time since November.

The industrial and consumer discretionary sectors paced broad-based declines as shares of industrial robot maker Fanuc Corp 6954.T and apparel retailer Fast Retailing Co Ltd 9983.T fell.

Iran launched a missile attack on U.S.-led forces in Iraq, hours after the funeral on Tuesday of Iranian commander whose killing in a U.S. drone strike has raised fears of a wider war in the Middle East. fired more than a dozen ballistic missiles from Iranian territory against at least two Iraqi military bases hosting U.S.-led coalition personnel, the U.S. military said on Tuesday.

Iran's Revolutionary Guards confirmed that they fired the rockets in retaliation for last week's killing of Qassem Soleimani, according to state TV.

"Investors are unwinding long positions built up last year," said Kiyoshi Ishigane, chief fund manager at Mitsubishi UFJ Kokusai Asset Management Co in Tokyo.

"There is concern about what comes next in the Middle East. Another concern is oil prices will skyrocket at a time when Japan's manufacturing sector is weak, which is a negative for the corporate sector."

There were 222 decliners on the Nikkei index against 2 advancers on Wednesday.

The largest percentage losses in the index were maritime shipper Kawasaki Kisen Kaisha Ltd 9107.T down 5.14%, followed by chemicals maker Tosoh Corp 4042.T losing 4.77% and medical device maker Olympus Corp 7733.T down by 4.39%.

The percentage gainers in the index were oil and natural gas developer Inpex Corp 1605.T up 1.06%, followed by oil refiner JXTG Holdings Inc 5020.T up by 0.15%.

U.S. crude CLc1 surged by 4.08% to $65.28 a barrel after the Iranian attacks, which could raise costs for end users but could boost earnings for producers and refiners.

The broader Topix index .TOPX fell 2.32% to 1,685.47, also the biggest percentage decline since March last year.

The volume of shares traded on the Tokyo Stock Exchange's main board .TOPX was 0.51 billion, compared to the average of 1.11 billion in the past 30 days.

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