Japan's Nikkei tanks more than 4% as Middle East conflict intensifies

By Junko Fujita

TOKYO, March 4 (Reuters) - Japan's Nikkei share average slipped to a one-month low on Wednesday, as investors sold risk assets amid an intensifying Middle East conflict.

The Nikkei .N225 fell as much as 4.7% soon after trading resumed in the afternoon. The index was last down 4% at 54,023.63, its lowest since February 6, and was on track for a third consecutive session of losses.

The broader Topix .TOPX lost 4.33% to 3,608.54.

The Nikkei volatility index .JNIV, a gauge of investor anxiety, rose to its highest since August 2024, reflecting stronger demand for protection against stock-market declines.

Investors sold down risk assets, particularly the Nikkei and the KOSPI, which have outperformed other major indexes and become a target of a heavier selloff as they try to book profits, said Kazuaki Shimada, chief strategist at IwaiCosmo Securities.

Shares in Seoul's benchmark index .KS11 dived 7% on the day. The Korea Exchange earlier activated circuit breakers on the KOSPI after the index tumbled 8%.

Israeli and U.S. forces pounded targets across Iran on Tuesday, prompting Iranian retaliatory strikes around the Gulf as the conflict spread to Lebanon, rattled global markets and sent oil prices soaring.

In Japan, chip-related heavyweights led the Nikkei's decline, with Advantest 6857.T and Tokyo Electron 8035.T falling 6.8% and 5%, respectively. Technology investor SoftBank Group 9984.T lost 9%.

All 33 industry indexes slipped, with the oil refinery index .IPETE.T falling 8% to be as the worst performer.