The benchmark Nikkei average briefly tumbled more than 500 points in early trading on the Tokyo Stock Exchange on Monday, battered by a plunge in U.S. equities late last week and a stronger yen.
At 9:03 a.m., the 225-issue Nikkei touched a low of 20,172.76, down 537.18 points, or 2.59 percent, from Friday’s closing.
Tokyo stocks skidded lower almost across the board, after the Dow Jones industrial average finished Friday’s trading with a loss of more than 600 points as U.S.-China trade tensions escalated. Beijing said it would slap retaliatory tariffs on $75 billion worth of U.S. goods, while U.S. President Donald Trump immediately vowed to fight back.
The Nikkei suffered a major setback after a two-session rise, also pressured by the yen’s strengthening against the dollar, with the Japanese currency attracting safe-haven buying amid worries that the worsening U.S.-China trade war may lead to a global economic slowdown, market players said.
In Tokyo currency trading, the dollar was quoted at ¥104.88-92 at 9 a.m., down sharply from ¥106.63-64 at 5 p.m. Friday.
Reflecting risk aversion among investors, Japanese government bonds attracted buying, with the benchmark 10-year JGB yield dropping to a three-year low of minus 0.265 percent in early trading on Monday.
The yield on the 355th issue of 10-year JGBs, with a coupon of plus 0.100 percent, fell 0.025 percentage point from late Friday to hit the lowest level since July 29, 2016.