TOKYO: Tokyo shares fell from 11-month highs Monday morning with exporters hit by a stronger yen and energy firms tumbling on lower oil prices.
The Organization of the Petroleum Exporting Countries (OPEC) will meet in Vienna on Wednesday, with hopes it will codify a broad agreement struck in Algeria in September to cut production and protect prices.
But crude rates sank Friday on fears for the agreement as producers clash over how its implementation, with Iran and Iraq pressing to be excluded and Russia suggesting it will only freeze output.
News that Saudi Arabia, the kingpin of the OPEC cartel, had walked out of talks on Monday -- and suggested demand will pick up in 2017 -- has led to worries a settlement will not be reached before its twice-yearly meeting.
"Lately we're often seeing cases where the oil market's moves precede those in the equities market," said Shoji Hirakawa, chief global strategist at Tokai Tokyo Research Institute..
"I expect Japanese stocks to price in the fall in crude oil abroad today," he told Bloomberg News.
The benchmark Nikkei 225 index dropped 0.80 percent, or 146.32 points, to 18,234.90 by the break, while the broader Topix index of all first-section issues was down 0.37 percent, or 5.40 points, at 1,459.13.
The dollar's sharp rise took a breather with the greenback changing hands at 111.66 yen on Monday against 113.08 yen in New York on Friday -- and well off the levels approaching 114 yen seen at the end of last week.
The dollar has risen in tandem with expectations that Donald Trump's presidency will feature big government spending and tax cuts aimed at stoking growth in the world's top economy.
Japanese exporters are sensitive to gains in the yen as a stronger currency tends to dent profits by making their products more expensive abroad while slashing the value of repatriated earnings.
Toyota was down 1.91 percent to 6,561 yen and Sony fell 1.05 percent to 3,293 yen.
Oil explorer Inpex fell 1.77 percent to 1,079.5 yen and Japan Petroleum tumbled 3.01 percent to 2,414 yen.
SoftBank sank 2.00 percent to 6,664 yen while Fast Retailing, the operator of Uniqlo clothing stores, dipped 1.23 percent to 40,860 yen.
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