Tokyo Stocks Plunge as Trump Threatens Iran Over Hormuz Strait
Tokyo stocks plunged Monday after a sharp rise in crude oil and a major geopolitical escalation. The drop followed a social media post by President Trump that threatened Iran if it did not reopen the Strait of Hormuz.
Market losses and sector impact
The Nikkei 225 closed at 51,515.49, down 1,857.04 points. That was a 3.48 percent loss from Thursday.
The broader Topix finished at 3,486.44, down 122.96 points or 3.41 percent. The Nikkei briefly lost over 2,600 points early in the session.
Prime Market decliners included marine transportation, nonferrous metals and real estate. Dealers noted dip-buying trimmed some losses in the afternoon.
Two-day slide and oil price shock
The Nikkei has fallen more than 3,700 points over two trading days amid rising Middle East tensions. West Texas Intermediate crude briefly topped $100 per barrel during the crisis.
Concerns over shipping disruptions and higher energy costs weighed on investor sentiment. Market participants feared an economic slowdown driven by rising prices.
Currency and bond moves
The dollar rose into the upper 159 yen range on a flight to safety. At 5 p.m., the dollar fetched 159.58-60 yen.
That compared with 159.18-28 yen in New York at 5 p.m. Friday. The euro was quoted at $1.1527-1.1529 and 183.96-184.00 yen in Tokyo.
Policy signals and intervention concerns
Atsushi Mimura, vice finance minister for international affairs, warned Japan would act against speculative currency moves. His remarks capped the dollar’s upside amid intervention worries.
Bond yields
The yield on the benchmark 10-year Japanese government bond rose to 2.305 percent. That was an increase of 0.045 percentage point from Thursday’s close.
Trigger and official statements
President Trump gave Iran 48 hours to open the strait in a post at 8:44 a.m. Sunday, Japan Standard Time. Iran warned it would close the waterway completely if its power plants were attacked.
Those competing warnings intensified market stress and drove crude oil higher. The situation raised fears of a prolonged conflict.
Analyst reactions
Maki Sawada, a strategist at Nomura Securities, said no progress toward a resolution has been seen. She noted the escalation had not yielded diplomatic movement.
Shota Sando, an analyst at Tokai Tokyo Intelligence Laboratory, said investors adjusted positions. He added markets priced in the possibility of a prolonged war.
Coverage by Filmogaz.com.
