TOKYO, March 3 (Xinhua) -- Tokyo stocks extended losses for a fourth consecutive day Monday with the benchmark Nikkei stock index dropping 1.27 percent as rising political tension in Ukraine sent the yen higher and investors opting to shift issues susceptible to currency fluctuations.
Local traders said that the escalating geopolitical situation in Ukraine pressured the U.S. dollar and the euro and sent investors into a "risk-off" mood.
They said that external factors were still contributing to market players' moves and bets were being hedged in case the crisis escalates, which accounted for Monday's selloff.
Takashi Hiroki, chief strategist at Monex Inc., noted that the a number of global incidents had contributed to pulling the market here down on the first trading day of the week, including the instability in Ukraine, and despite the possible limited impact on the global economy, investors would be risk-averse going forward, as the situation in Ukraine develops.
Other analysts suggested that buying Japanese issues would not be an attractive option given the current geopolitical situation, but the yen would, for the time being, be used as a safe haven.
Yusuke Kuwayama, a portfolio manager at Tokio Marine & Nichido Fire Insurance Co. added, however, that the markets Monday may have overacted and said that such geopolitical incidents can lead to fruitful buying chances when they are resolved.
The 225-issue Nikkei Stock Average dropped 188.84 points from Friday to close at 14,652.23, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange lost 14.90 points, or 1.23 percent, to finish at 1,196.76.
With the U.S. dollar dropping to the lower 101 yen level, export-related issues here took a hit, with Toyota Motor skidding down 1.1 percent to 5,773 yen, while Nissan Motor lost 0.7 percent to 905 yen. Mazda Motor also closed in negative territory, tumbling 3.5 percent to 472 yen.
Consumer electronics giant Sony retreated 1.1 percent, to 1,760 yen, while Olympus dropped 3 percent and camera maker Canon Inc. fell 2 percent to 3,100 yen.
But it was Japanese pharmaceutical firm Astellas that weighed heavily on Monday's Nikkei, slumping 4.8 percent to 6,279 yen, following the firm announcing a larger than expected fresh share issuance to boost its investment foundations.
Trading volume on Monday dropped to 2.18 billion shares on the Tokyo Exchange's First Section, from Friday's volume of 2.32 billion shares, with declining issues outnumbering advancing ones by 1,351 to 351.