TOKYO: Japan’s Nikkei share average fell on Monday as US attacks on Iranian nuclear sites fueled risk aversion, while the accompanying jump in oil prices weighed on the outlook for Japan’s economy and corporate earnings.
The Nikkei declined 0.13% to 38,354.09 as of the close, with 154 of its components declining, versus 69 that rose and two that ended flat. However, that was well off the lows from early in the session, when the benchmark index slid around 1%.
The broader Topix slipped 0.36%.
“Owing to the strong sense of uncertainty in the current situation, many investors are taking a wait-and-see stance,” said Yutaka Miura, senior technical analyst at Mizuho Securities.
Drivers of Nikkei direction, including oil and the exchange rate, “are likely to fluctuate widely in response to any developments in the Middle East”.
Japan, which imports almost all of its oil, is highly sensitive to crude prices that surged to six-month peaks on Monday as traders waited nervously to see Iran’s response to the US’s entry into the conflict.