Battered by the yen’s rise against the dollar and heightened tensions in the Middle East, stocks fell back sharply on the Tokyo Stock Exchange on Friday.
The 225-issue Nikkei average went down 204.22 points, or 0.95 percent, to end at 21,258.64, after advancing 128.99 points Thursday.
The Topix index of all first-section issues dropped 14.00 points, or 0.90 percent, at 1,545.90. It gained 4.63 points the previous day.
After opening almost flat, the market came under selling pressure exerted by profit-takers and the stronger yen, brokers said.
The key Nikkei average moved around the previous day’s closing level until around midmorning. But the yen’s further appreciation against the dollar and a drop in the Nikkei futures price sent the index deep into negative territory in the afternoon.
Behind the afternoon plunge were fears of an increase in U.S.-Iran tensions, an official at a bank-affiliated brokerage house said.
Concerns over an escalation of the conflict between Washington and Tehran were fueled by a media report that U.S. President Donald Trump had given the go-ahead for limited strikes against Iran in retaliation for the downing of a U.S. military drone, brokers said. Trump, however, abruptly withdrew the approval, according to the report.
“Besides, investors turned reluctant to buy stocks before the weekend and a Group of 20 summit” in Osaka on June 28-29, Ryuta Otsuka, strategist at the investment information department of Toyo Securities Co., pointed out.
Falling issues outnumbered rising ones 1,458 to 619 in the TSE’s first section, while 68 issues were unchanged.
Volume increased to 1.53 billion shares from Thursday’s 1.01 billion.
Automakers including Toyota and Subaru were sold amid growing worries about the higher yen dampening their earnings.
Shiseido, Kose and other cosmetics makers soured after a news report said China will tighten e-commerce regulations.
Among other losers were troubled Daiwa House and drug maker Eisai.
On the other hand oil names, such as Inpex and Idemitsu, were buoyed by a rise in New York crude futures following the drone downing.
Also on the positive side were Sumitomo Metal Mining and factory automation equipment maker Keyence.
In index futures trading on the Osaka Exchange, the key September contract on the Nikkei average dropped 210 points to end at 21,190.