Japan’s stocks led losses across much of Asia as oil prices continued to slide and with investors remaining cautious ahead of a widely-expected US interest rate rise this week.
The benchmark Nikkei 225 closed down 1.8% at 18,883.42.
The index fell 3% in earlier trade as the yen gained against the dollar.
A stronger yen makes Japan’s exports more expensive to buy overseas and hurts exporters when they repatriate their earnings.
Meanwhile, a better-than-expected business sentiment survey from the Bank of Japan failed to boost investor sentiment.
The closely watched Tankan index showed sentiment at major companies was unchanged at +12 for the fourth quarter.
Capital Economics’ Marcel Thieliant said the index had been expected to weaken.
“Business conditions for non-manufacturing firms were unchanged [and] remained the strongest they have been since the early 1990s,” he said.
Elsewhere, Australia’s benchmark S&P/ASX 200 closed down 2% at 4,928.60 as energy-related stocks dragged on the market.
“The key factor affecting the market at the moment is the continuing oversupply of oil,” said Gary Huxtable of Atlantic Pacific Securities. “It is dragging energy stocks down.”
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