TOKYO: Japanese shares and the yen fell on Monday, while government bonds rose, as investors saw no clear end to US and Israeli military strikes following the killing of Iran’s leader.
The benchmark Nikkei 225 Index fell 1.3 percent to close at 58,057.24, its steepest drop in five weeks. The broader Topix slid 1 percent.
The yen weakened 0.6 percent to 156.95, while the yield on the 10-year Japanese government bond fell 5 basis points (bps) to 2.06 percent.
Bond yields move inversely to prices.
Global markets were roiled, as Israel launched a new wave of strikes on Iran, and Tehran retaliated with more missile barrages following the killing of Supreme Leader Ali Khamenei. US President Donald Trump signalled that the assault on Iranian targets could continue for weeks.
Airlines were among the biggest decliners, while bank and brokerage shares were hit hard after British’s mortgage provider Market Financial Solutions filed forbankruptcy.
A 10 percent rise in crude oil prices could push the net profit of Topix-listed companies down about 1 percent to 2 percent, said Kazunori Tatebe, chief strategist at Daiwa Asset Management.
“The market is uncertain whether the conflict will go on for a long time or end soon. If it is escalated, the rise in oil prices will hit Japanese firms’ earnings,” Tatebe said.
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