Japan’s Nikkei Index Records Biggest Drop in 5 Weeks

Japan’s Nikkei index posted its biggest drop in more than five weeks on Monday as the Russia-Ukraine war showed no signs of ending, driving up oil and other commodity prices and raising fears of an inflationary shock accompanied by a global economic recession.

The Nikkei index lost 2.94 percent to close at 25,221.41 points, its biggest drop since Jan. 27. Earlier in the session, it recorded its lowest level since November 2020 at 25006.26, near the 25,000 point level, which represents a psychological barrier.

The energy sub-sector bucked the general trend, rising 4.81 percent, after fears that Russian oil supplies would soon be cut off led to a sharp rise in crude oil prices.

The broader Topix index also fell 2.76 percent.

Russian President Vladimir Putin has vowed to press ahead with his invasion of Ukraine, which Russia describes as a “special operation”, unless Kyiv surrenders, despite harsh Western sanctions and widespread international condemnation.

Shares of giant Japanese chip makers fell, with Tokyo Electron falling 4.87 percent, becoming the biggest loser on the Nikkei index, while Advantest fell 5.58 percent and Renesas fell 6.18 percent.

Panasonic shares fell 5.17 percent and Swift Bank Group shares fell 5.16 percent.

Honda shares fell 3.2 percent after it announced a joint venture with Sony to manufacture electric cars, while Sony’s shares fell 2.42 percent.