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Asian stock markets were trading largely lower on February 2 following a lackluster lead from the US overnight and as oil prices fell again.

Japan’s Nikkei 225 closed down 0.64% at 17,750.68 points.

Tokyo’s benchmark index closed up nearly 2% on February 1, its highest close since early January, after a surprise move by the Bank of Japan cut rates to -0.1%.

In Australia, energy-related stocks weighed on the market, hurt by oil price worries.

Australia’s benchmark ASX 200 shed 1%, dragged down by shares in energy giants including BHP, Woodside and Santos.Asian stock markets decline February 2016

Investors also reacted to a move by ratings agency S&P to lower its rating for BHP to “A” from “A+” due to falls in commodity prices, among other issues.

Shares in Woodside closed down 3.2%, Santos lost 4.26%, and BHP ended the trading day down 2.16%.

As widely expected, the Reserve Bank of Australia kept its rates on hold on February 2 at a record low of 2%, where they have been since May 2015.

Meanwhile, Hong Kong’s Hang Seng index was down 0.81% at 19,441.95 in afternoon trade, while the Shanghai Composite was bucking the regional trend to be up 1.93% to 2,741.39.

South Korea’s Kospi index closed down 1% to 1,906.60, in line with the rest of the region.

Asian markets have dropped in early trading after two explosions hit the Boston Marathon finishing line killing three people and injuring dozens more.

Stock indexes fell by as much as 2% in Japan. South Korea and Australia also dropped, as did oil and gold prices.

Earlier on Monday, US markets closed lower after the blasts accelerated a sell-off started by weak economic data.

Analysts said that investors would be more risk averse in coming sessions and would focus on Asia’s problem areas.

“This is a kind of unknown-unknown event and a stark reminder that the world continues to remain unsafe,” said Vishnu Varathan of Japanese bank Mizhuo.

“While it has happened far away from Asia, it is likely to trigger concerns and fears over Asia’s known-unknowns.

“You have the Korean peninsula tensions, the territorial dispute between China and Japan, and other issues in the China Sea which all pose risks if they flare up,” he added.

Asian markets have dropped in early trading after two explosions hit the Boston Marathon finishing line killing three people and injuring dozens more

Asian markets have dropped in early trading after two explosions hit the Boston Marathon finishing line killing three people and injuring dozens more

Faced with these problems, investors reacted to the news of the blasts by trying to cut risks, not least because in recent weeks stock markets in Asia have seen strong gains.

Japan’s Nikkei 225 index was recently trading 1% lower, while South Korea’s Kospi was down 0.9% and Australia’s ASX 200 shed 0.8%.

In the US, all three of the country’s main stock indexes closed lower on Monday. The Dow Jones ended the day down 1.8%, while the S&P shut 2.3% lower and the Nasdaq shed 2.4%.

Oil prices dropped in Asia, with US light crude down by 1.9%, and Brent crude sliding 1.6%. Gold continued to fall, extending Monday’s 10% fall and continuing to hit its lowest levels in two years.

By contrast, the Japanese yen gained against the US dollar because many investors see it as a less risky asset.

“The developments in Boston are likely to trigger an initial reaction of caution,” said Michael McCarthy, chief market analyst at CMC Markets.

The Japanese currency rose as much as 2.5% to 96.61 yen against the US dollar in New York on Monday. It also gained nearly 3% against the euro, rising as high as 125.98 yen against the single European currency.

Analysts said that many large Japanese banks or pension funds tended to sell riskier assets during times of uncertainty, bringing the money back into the country, resulting in an appreciation in the yen’s value.

Knowing this, other global investors also buy the yen, or yen-denominated assets, to benefit from this gain. However, once the risks recede, then investors tended to sell their yen and use the proceeds to again invest in riskier assets.

Analysts said the blasts had further dented investor morale in both Asia and elsewhere, which had already been shaken by weaker-than-expected Chinese and US data.

They also pointed to a number of potential Asian flashpoints that caused investors to be cautious, such as the heightened tensions on the Korean peninsula.

North Korea has recently conducted a nuclear test, and in recent weeks it has also threatened to attack South Korea, Japan and US bases in the region.

Meanwhile, the spat between China and Japan over a set of disputed islands in the East China Sea has flared up. The issue is yet to be resolved and continues to remain a bone of contention between Asia’s two biggest economies.

Analysts have often have warned that an escalation of any of these issues was likely to hurt the region’s economic growth.

“Asia is increasingly relying on intra-regional trade to sustain its economic growth,” said Vishnu Varathan of Mizhuo.

“Any full-blown conflict between Asian nations will hurt trade and could adversely impact economic growth.”