Japanese stocks dropped to a two-month low Friday, leading most Asian markets lower, after U.S. President Barack Obama authorized airstrikes in Iraq, casting a pall on equity sentiment and the dollar.
The Nikkei Stock Average fell 3.0% to 14778.37 for its worst daily decline in almost four months. South Korea's Kospi lost 1.1%, Australia's ASX200 closed 1.3% lower, Singapore's Straits Times Index lost 0.8% and India's Sensex was down 1.1%. The Shanghai Composite and Hong Kong's Hang Seng Index managed modest gains, however.
"It may not necessarily be the reintroduction of geopolitical risk per se that has investors rattled, since jitters over Russia and Ukraine and the chance of more military involvement by the U.S. in Iraq have been simmering for some time," said Chris McGuire, chief executive of hedge fund Phalanx Capital Management. "But markets globally don't seem to be able to handle increasing risk well at all lately, and this is perhaps a reaction to seeing U.S. markets show such resilience for so long until very recently."
The dollar fell sharply after Mr. Obama authorized targeted strikes in Iraq to protect the Yazidi minority and U.S. personnel there. At the close in Tokyo, the greenback was changing hands at ¥101.74, against ¥102.37 Thursday. A falling dollar hurts Japanese and other Asian exporters who need to repatriate earnings.
Gold prices rose, while U.S. 10-year Treasury yields dropped to around 2.42% as investors moved to safer assets.
At the end of its two-day policy board meeting, the Bank of Japan cut its views on exports and industrial production, boosting expectations of further easing from the central bank in coming months. But the announcement had far less impact than corporate earnings-related news, much of which triggered adverse share price reactions amid the overall market negativity.
Sumitomo Metal Mining, Mitsubishi Materials, and Nippon Electric Glass all fell at least 6.8% after posting disappointing results after Thursday's close. Shares of heavily weighted Nikon lost 9.4% after the company made a 19% downward revision to its fiscal year consolidated net profit.
The Nikkei Stock Average fell 3.0% to 14778.37 for its worst daily decline in almost four months. South Korea's Kospi lost 1.1%, Australia's ASX200 closed 1.3% lower, Singapore's Straits Times Index lost 0.8% and India's Sensex was down 1.1%. The Shanghai Composite and Hong Kong's Hang Seng Index managed modest gains, however.
"It may not necessarily be the reintroduction of geopolitical risk per se that has investors rattled, since jitters over Russia and Ukraine and the chance of more military involvement by the U.S. in Iraq have been simmering for some time," said Chris McGuire, chief executive of hedge fund Phalanx Capital Management. "But markets globally don't seem to be able to handle increasing risk well at all lately, and this is perhaps a reaction to seeing U.S. markets show such resilience for so long until very recently."
The dollar fell sharply after Mr. Obama authorized targeted strikes in Iraq to protect the Yazidi minority and U.S. personnel there. At the close in Tokyo, the greenback was changing hands at ¥101.74, against ¥102.37 Thursday. A falling dollar hurts Japanese and other Asian exporters who need to repatriate earnings.
Gold prices rose, while U.S. 10-year Treasury yields dropped to around 2.42% as investors moved to safer assets.
At the end of its two-day policy board meeting, the Bank of Japan cut its views on exports and industrial production, boosting expectations of further easing from the central bank in coming months. But the announcement had far less impact than corporate earnings-related news, much of which triggered adverse share price reactions amid the overall market negativity.
Sumitomo Metal Mining, Mitsubishi Materials, and Nippon Electric Glass all fell at least 6.8% after posting disappointing results after Thursday's close. Shares of heavily weighted Nikon lost 9.4% after the company made a 19% downward revision to its fiscal year consolidated net profit.
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