Tokyo equities tumbled on March 9, with the Nikkei Stock Average posting its third-largest point decline on record as crude prices surged amid rising expectations of a prolonged Middle East conflict.

The 225-share Nikkei closed down 2,892.12 points, or 5.20%, at 52,728.72. The broader TOPIX meanwhile ended 141.09 points, or 3.80%, lower at 3,575.84, Kyodo News reports

On the Tokyo Stock Exchange’s Prime Market, the sharpest declines, however, were seen in non-ferrous metals, glass and ceramics, and machinery shares.

The US dollar traded largely in the upper JPY158 range in Tokyo, reflecting concerns about the economic impact of rising crude prices. At 5pm Japan time, the dollar stood at JPY158.45–47, compared with JPY157.79–89 in New York and JPY157.52–55 in Tokyo at the same time just before the weekend.

The euro was quoted at $1.1563–1565 and largely unchanged against the yen at JPY183.22–26, against $1.1613–1623 and JPY183.22–32 in New York and $1.1614–1615 and JPY182.96–183.00 in Tokyo late on March 6.

The yield on the benchmark 10-year Japanese government bond rose 0.025 percentage points from the March 6 close to 2.185%, as higher oil prices fuelled concerns about inflation.

Market expectations for a swift resolution to the conflict in Iran weakened substantially following reports that US president Donald Trump had shown interest in deploying US ground troops inside the country, dealers said.

Another factor - the appointment of Mojtaba Khamenei as Iran’s new supreme leader, announced on March 9 after the killing of his father Ali Khamenei a week prior - also heightened fears that the military conflict and the surge in oil prices could persist for some time yet.