Nikkei 225 slumps 1%, drives rest of Asia lower

The sentiment turned sour on the Asian equity markets this Thursday, as investors took the negatives cues from the Wall Street overnight. The US markets ended sharply lower in wake of increased cautiousness heading into the New Year, with markets apprehensive of what’s in store in the New Year.

While broad US dollar weakness extended and reinforced yen strength into Asia, thus, prompting a sharp sell-off in the Japanese stocks, particularly the exporters’ stocks. The USD/JPY pair dropped as low as 116.68 last hour, before recovering some ground to now trade around 116.85 levels, still down -0.32% so far.

Further, negative oil prices amid a surprise inventory build also added to the risk-off moods prevalent in the markets, and weighed down on the energy and resource stock on the region’s indices.

Meanwhile, the Japanese shares headed toward their biggest drop in more than a month while Australia’s benchmark fell from the highest level since August 2015. 

The Japanese Nikkei 225 index drops -1% to 19,200 levels. The Australian benchmark, ASX 200 index trades subdued around 5,684 points. Mainland Chinese markets traded marginally lower, with the Shanghai composite down -0.25% while the Shenzhen composite dropped -0.25%. Hong Kong's Hang Seng was down -0.43%.