Tokyo share prices sank Monday morning as oil prices soared, with the Nikkei 225 stock average dropping as much as 7.6% before the lunch break.
Crude oil rose to $117 a barrel in Asia trading Monday, up 30% from Friday, as the war in the Middle East continued and concerns increased that global oil supplies could be seriously disrupted.
An estimated 94% of Japan’s oil comes from the Middle East, and most of that transits the Strait of Hormuz.
U.S. and Israeli armed forces attacked Iran just over a week ago in a massive assault that killed Ayatollah Ali Khamenei, the nation’s supreme leader for nearly four decades.
Hostilities have since escalated, and the Iranian government has declared the Strait of Hormuz closed.
An unexpectedly weak jobs report issued by the United States government Friday also took a toll on the equity markets.
The U.S. lost 92,000 jobs in February, data from the Bureau of Labor Statistics showed, adding to concerns that the U.S. economy might face a double whammy in light of the ongoing war in the Middle East.
In trading Monday, the Nikkei 225 fell to 51,407.66, the morning low, at 11:05 a.m. The morning close was 51,740.46, down 6.98%. The index was near 60,000 at the end of February.
The yen weakened to about ¥158.71 to the dollar on Monday morning, from just under ¥158 on Friday.
South Korea’s benchmark KOSPI declined 8% on Monday, triggering circuit breakers at the Korea Exchange.