Tokyo stocks dropped Wednesday as investors took fright at mounting tension between the United States and Iran, but the market avoided free-fall as Tehran said it had "concluded" for now its missile attacks on US forces in Iraq.

The benchmark Nikkei average briefly tumbled over 600 points to slip below 23,000 the Tokyo Stock Exchange on Wednesday morning amid growing tensions in the Middle East.

The Nikkei 225 index fell 2.65 percent or 624.54 points to 22,951.18,from Tuesday, falling below 23,000 for the first time since Nov. 21 last year on an intraday basis

while the broader Topix index fell 1.37 percent or 23.65 points to 1,701.40.

Selling hit Tokyo stocks almost across the board from the outset of the day's trading, as investors grew highly risk-averse following reports that a U.S. military base in Iraq was attacked by tens of ballistic missiles from Iran, brokers said.

With Iran apparently having retaliated against a recent US airstrike that killed Iran's Gen. Qasem Soleimani, market players are nervously waiting to see whether U.S. President Donald Trump will take another tough measure, said an official of a Japanese asset management company.

The yen's strengthening against the dollar stemming from active risk-off selling of the U.S. currency also weighed on the Tokyo stock market, mainly on export-oriented issues.

In Tokyo currency trading, the dollar stood at 107.85-86 yen at 10 a.m., down from 108.33-33 yen at 5 p.m. 

JIJI Press/AFP