Japan's Nikkei drops 2% as investors monitor Ukraine tensions; oil rises more than 1%

SINGAPORE — Shares in Japan led losses in Asia-Pacific during Monday trade as investors monitor monitor developments from the Covid situation in Hong Kong to tensions between Russia and Ukraine.

The Nikkei 225 dropped 2% in morning trade while the Topix index shed 1.8%. South Korea's Kospi declined 1.34%.

Elsewhere, the S&P/ASX 200 in Australia climbed 0.44%.

MSCI's broadest index of Asia-Pacific shares outside Japan traded 0.22% lower.

Developments surrounding Russia-Ukraine tensions continued to be monitored by investors. Fears of a Russia attack on Ukraine sent stocks on Wall Street plunging Friday, with the Nasdaq Composite falling nearly 3%.

Investors in Asia will also watch developments in Hong Kong's Covid situation, as the city's medical capacity becomes reportedly stretched following a recent spike in infections. Over the weekend, Hong Kong's chief secretary announced that mainland China will assist the city in areas such as testing and quarantine facilities.

Oil prices were higher in the morning of Asia trading hours, with international benchmark Brent crude futures jumping 1.28% to $95.65 per barrel. U.S. crude futures surged 1.58% to $94.57 per barrel.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 95.942 — largely holding on to gains following its recent recovery from around the 95.7 level.

The Japanese yen traded at 115.55 per dollar, having strengthened sharply from above 116 against the greenback late last week. The Australian dollar was at $0.7146, off levels above $0.72 seen last week.