Japan’s Nikkei loses most in 3 weeks on Ukraine, U.S. inflation risks

Japan’s Nikkei index fell on Monday by its most in nearly three weeks, dragged down by technology stocks, on investor concerns over escalating tensions surrounding Ukraine and broadening inflationary risks.

The Nikkei share average lost 2.23% to close at 27,079.59, posting its biggest daily percentage drop since Jan. 27 and touching below the 27,000 level for the first time since Jan. 31. The broader Topix lost 1.63% to 1,930.65.

“Because the market was closed (in Japan) on Friday, today’s market was hit by two separate negative news that happened last week – tensions surrounding Ukraine and Russia, and the sharp rise in U.S. consumer prices,” said Shuji Hosoi, a senior strategist at Daiwa Securities.

“If the Ukraine situation gets worse, the market could fall further.”

Wall Street ended sharply lower on Friday for the second straight session, as investors fretted about deepening tensions between Russia and the West over Ukraine, U.S. inflation and prospects of aggressive interest rate hikes by the Federal Reserve.

Data from the Labor Department showed U.S. consumer prices last month surged 7.5% year-over-year, topping economists’ estimates of 7.3% and marking the biggest annual increase in inflation in 40 years.