Oil spikes, stocks plunge after Iran attacks

Oil prices spiked on Wednesday and Tokyo stocks plunged as investors took fright at escalating tensions between United States and Iran after Tehran launched missile attacks on US forces in Iraq. As news broke of a missile attack against two airbases in Iraq housing US and coalition forces, benchmark Nikkei 225 index dropped nearly 2.5 per cent, with broer Topix index off more than two percent.

"It's t going to be pretty today," said AxiTrer's Stephen Innes, reacting to initial reports of Iran's first response to US assassination of military commander Qasem Soleimani.

Oil climbed sharply higher on news, with benchmark WTI jumping as much as 4.53 percent to USD 65.54 a barrel before settling down slightly. Japanese stocks were also affected by flight to safe-haven yen -- an asset in which investors often take refuge in times of uncertainty. A rising yen pulls down price of Japan's export-led firms.

" yen is firming to 107.78-79 levels" that generally hurt Japanese stocks, Kyoko Amemiya, senior market viser at SBI Securities, told AFP.

Japanese stocks are also being hit by concerns over ecomic impact on resource-poor Japan from a higher oil price, Amemiya said. Before latest escalation, investors h been weighing how to tre latest flare-up in Middle East tensions, with stocks choppy since Soleimani's killing. In Tuesday tre, US stocks h finished slightly lower while European markets were broly flat -- Frankfurt outperforming its peers with a 0.8 per cent gain.

Iran fired "more than a dozen" ballistic missiles Tuesday against two airbases in Iraq where US and coalition forces are based, US Department of State said after Tokyo market opened.

"It is clear that se missiles were launched from Iran and targeted at least two Iraqi military bases hosting US military and coalition personnel at Al-Ass and Irbil," Assistant to Secretary of Defense for Public Affairs Jonathan Hoffman said in a statement.

dollar fetched 107.78 yen in early Asian tre, against 108.42 yen in New York on Tuesday. In Tokyo, higher yen hit blue-chip exporters, which were down across board, with Sony slipping 1.07 percent to 7,573 yen and game giant Nintendo tring down 1.07 per cent at 42,480 yen.

Car giant Toyota was off 1.45 per cent at 7,603 yen and chip-making equipment manufacturer Tokyo Electron down 1.34 per cent at 23,200 yen. Nissan was down 1.20 percent at 628.8 yen ahe of its former CEO Carlos Ghosn's press conference in Leban after his audacious escape from Japan.

Overall, Nikkei 225 index was tring 576.26 points lower at 22,999.46 about 30 minutes after opening bell, while broer Topix index fell 37.90 points to 1,687.15.