Japanese stocks fell on the first trading day of the year as the yen traded near the highest in more than two months and investor appetite waned for risky assets after Saudi Arabia cut diplomatic ties with Iran.
The Topix index declined 0.9 percent to 1,533.78 as of 9:01 a.m. in Tokyo as tire makers led losses, while energy explorers rose. The index climbed 9.9 percent last year, its fourth straight year of gains. The Nikkei 225 Stock Average lost 1 percent to 18,838.87. The yen traded at 120.31 per dollar as crude oil surged after Saudi Arabia expelled the Islamic Republic’s diplomats from the country following an attack on its embassy in Tehran to protest the Saudis’ execution of a prominent Shiite cleric. The move marks the worst crisis in relations between the nations since the late 1980s.
West Texas Intermediate crude rose 2.4 percent on the first trading day of the year after tumbling more than 30 percent in 2015. Saudi Foreign Minister Adel al-Jubei announced the expulsion of Iran’s diplomats after Iranian protesters set the Saudi embassy on fire following the execution of Nimr al-Nimr, a critic of the kingdom’s treatment of its Shiite minority.