Japan's Nikkei index fell by more than two percent on Monday, affected by a decline in stocks related to the chip manufacturing sector and in light of a decline in risk appetite due to escalating tension in the Middle East.
The Nikkei index fell 2.03 percent, closing at 31,659.03 points. The broader Topix index lost 1.53 percent to 2,273.54 points.
Takehiko Masuzawa, head of trading at Phillip Securities in Japan, said in light of the high risks for the Middle East, investors are preparing for further declines in the markets and reducing their long-standing positions in stocks.
The Standard & Poor's 500 and Nasdaq indices fell on Friday as data on consumer sentiment deteriorated and the conflict in the Middle East worsened, which led to investors' reluctance to take risks. While the Dow Jones Industrial Average rose 0.12 percent.
Shares of heavyweight companies associated with chip manufacturing fell, tracking the shares of American technology companies, with Tokyo Electron and Advantest shares falling 3.84 percent and 4.79 percent, respectively.
