TOKYO , April 2 – Tokyo stocks dropped sharply Thursday, with the Nikkei stock index ending over 2 percent lower, as a sell-off accelerated after U.S. President Donald Trump’s speech rekindled concern that the Iran war would drag on.
The 225-issue Nikkei Stock Average ended down 1,276.41 points, or 2.38 percent, from Wednesday at 52,463.27. The broader Topix index finished 59.23 points, or 1.61 percent, lower at 3,611.67.
On the top-tier Prime Market, the main decliners were oil and coal product, insurance and nonferrous metal issues.
The U.S. dollar briefly strengthened to the mid-159 yen range in Tokyo amid a renewed flight to safety following Trump’s speech, as uncertainty over efforts to end the war grew.
Shares opened higher in early morning trading, tracking overnight gains on Wall Street, after Trump claimed on social media that “Iran’s new regime president” had asked the United States to end the war.
However, stocks turned lower as investor sentiment was dampened when Trump showed no signs of the war ending soon in his speech, which implied the possibility of further strikes on Iran, brokers said.
Although Trump said that the United States is on track to complete all of its military objectives, he said it will hit Iran “extremely hard” over the next two to three weeks.
Trump also said the United States will attack Iran’s electric power plants “very hard” if there is no deal.
The remarks prompted selling on concerns that the Middle East crisis would be prolonged, while Trump emphasized the U.S.’s victory in the speech.
The surge of the benchmark West Texas Intermediate crude oil futures contract to over $100 per barrel following his speech also pressured the market.
“Investors locked in gains following the previous day’s strong rally, as there were no further signals of improvement in the situation (of the Middle East),” said Koichi Fujishiro, senior economist at the Dai-ichi Life Research Institute.
