Tokyo stocks drop in morning after US strikes Iran, oil prices jump

This May 7, 2020 file photo shows the Tokyo Stock Exchange. (Mainichi)

TOKYO (Kyodo) — Tokyo stocks dropped Monday morning, pressured by fears of heightened tensions in the Middle East and surging oil prices after the United States struck Iranian nuclear facilities.

The 225-issue Nikkei Stock Average fell 227.60 points, or 0.59 percent, from Friday to 38,175.63. The broader Topix index was down 17.06 points, or 0.62 percent, at 2,754.20.

The U.S. dollar hit a one-month high in the upper 146 yen range in Tokyo as heightened tensions in the Middle East prompted investors to seek the currency, seen as a safe haven in times of emergency, dealers said.

At noon, the dollar fetched 146.54-59 yen compared with 146.00-10 yen in New York and 145.40-42 yen in Tokyo at 5 p.m. Friday.

The euro was quoted at $1.1498-1501 and 168.49-59 yen against $1.1517-1527 and 168.22-32 yen in New York and $1.1516-1517 and 167.45-49 yen in Tokyo late Friday afternoon.

Stocks declined as the U.S. attack on Iran on the weekend fueled concern about higher crude oil prices impacting the economy as Tehran may take retaliatory steps and close the Strait of Hormuz, a key waterway for oil transportation, brokers said.

The benchmark West Texas Intermediate crude surged about 5 percent from late last week to hit the $78 level per barrel, around a five-month high, in after-hours trading in New York on Sunday.

Meanwhile, heavyweight semiconductor-related issues fell following a report that the U.S. administration told major chipmakers it is considering revoking waivers that allow them to send chipmaking technology to China.