Tokyo stocks extended their losing streak to three days in active trading Tuesday, with the Nikkei index dipping below 25,000 for the first time in 16 months, as concerns grew over surging energy prices after the latest cease-fire talks between Russia and Ukraine made scant progress.
The 225-issue Nikkei Stock Average ended down 430.46 points, or 1.71 percent, from Monday at 24,790.95, its lowest closing level since Nov. 6, 2020. The broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 34.17 points, or 1.90 percent, lower at 1,759.86, the lowest since Dec. 8, 2020.
Every industry category lost ground, led by oil and coal product, iron and steel, and marine transportation issues. Trading was active, with the volume on the main section rising to 1,873.40 million shares, the highest since Nov. 30, 2021, from Monday's 1,750.53 million shares.
The two indexes lost around 6.5 percent each after three straight days of losses, as investor sentiment was weighed down by rising prices of crude oil and other commodities stemming from the escalating conflict in Ukraine.
The market came under additional pressure after Moscow and Kyiv failed to reach a cease-fire agreement Monday during their third round of negotiations, brokers said.
Toshikazu Horiuchi, an equity strategist at IwaiCosmo Securities Co., said investors have become risk-averse as "there has been no outlook for a possible resolution" of the conflict, adding that, "The longer the conflict goes on, the longer it would likely take for a rise in crude oil prices to halt."
West Texas Intermediate crude futures for April remain relatively high after briefly topping $130 per barrel in New York in after-hour trading Sunday, the highest level since late July 2008.
"Investors are worried about the impact of surging commodity prices on the economy. Since Japan relies heavily on energy imports, rising prices could pressure corporate earnings or lead to price hikes of goods," Horiuchi said.
The benchmark Nikkei index briefly crossed into positive territory in early trading, as investors scooped up recently battered shares, but losses gathered pace toward the end of the afternoon session.
On the First Section, declining issues outnumbered advancers 1,788 to 346, while 46 ended unchanged.
Nissan Motor dropped 25.6 yen, or 5.5 percent, to 438.8 yen after saying Monday it will temporarily halt production at its factory in St. Petersburg.
Air transportation issues fell on rising fuel prices and concerns over the impact of the Ukraine crisis on air travel. Japan Airlines lost 113 yen, or 5.8 percent, to 1,832 yen and ANA Holdings dropped 78.5 yen, or 3.5 percent, to 2,167.0 yen.
Energy-related shares were sold as investors locked in profits. Eneos Holdings slipped 25.4 yen, or 5.4 percent, to 448.2 yen, and Inpex fell 87 yen, or 6.1 percent, to 1,341 yen.
The U.S. dollar was firm in the mid-115 yen range after an overnight rise in U.S. Treasury yields raised expectations that the interest rate gap between the United States and Japan would widen, dealers said.
At 5 p.m., the dollar fetched 115.44-46 yen compared with 115.25-35 yen in New York and 115.01-03 yen in Tokyo at 5 p.m. Monday.
The euro was quoted at $1.0860-0862 and 125.37-41 yen against $1.0848-0858 and 125.12-22 yen in New York and $1.0870-0872 and 125.02-06 yen in Tokyo late Monday afternoon.
The yield on the benchmark 10-year Japanese government rose 0.010 percentage point from Monday's close to 0.150 percent, tracking a rise in yields of U.S. counterparts overnight.
Related coverage:
U.S. lawmakers unveil bipartisan plan to ban Russian energy imports
No deal after 3rd round of Ukraine-Russia cease-fire talks: report
Nikkei stock index ends at 16-month low on worries over oil price surge
