* Hits one-month low, records biggest fall in 3 months
* Shipper, airliners hit most; yen gain hurts exporters
* Oil companies gain on higher crude prices
By Hideyuki Sano
TOKYO, Jan 6 (Reuters) - Japan's Nikkei share average fell to a one-month low on Monday as selloff gripped the market on the first trading day of 2020 on fears of an escalation in U.S-Iran tensions.
U.S. President Donald Trump on Sunday threatened a "major retaliation" against Iran if Tehran were to hit back for the killing of one of its top military commanders.
The Nikkei share average fell 1.91% to 23,204.86, breaking below two-major support levels - 25-day moving average around 23,600 and 50-day average around 23,350 - to its lowest level since Dec. 4.
The broader Topix lost 1.39% to 1,697.49, its lowest close since late November. The Tokyo stock market was closed from Tuesday to Friday last week for New Year holidays.
Both the Nikkei and Topix marked their biggest fall in three months, with 1,835 out of 2,161 listed stocks on the main board in the red, the highest ratio in three months.
"The market will have to go through some correction. It was a bit overvalued to begin with, but the problems in the Middle East are the main drag now," said Nobuhiko Kuramochi, chief strategist at Mizuho Securities.
Concerns about a further escalation in the Middle East tension hit shippers and airlines, which fell 3.5% and 2.8%, respectively.
Two Nikkei heavyweights, SoftBank and Fast Retailing, also posted fairly large fall of 3.9% and 3%.
As the yen gained on safe-haven buying, a wide range of exporter shares took a hit. Honda Motor fell 3.0%, while Toyota Motor Corp dropped 1.9%.
Meanwhile, a spike in oil prices helped oil companies, with the Tokyo Stock Exchange's oil and coal producer index rising 2.9%. Inpex rose 4.1% while JXTG gained 3.4%.
Nissan Motor fell 1.7%, in line with the overall market, to an eight-year low. Its former chairman Carlos Ghosn fled Japan while on bail during Japan's market holidays.
Ghosn faced four charges - which he has denied - including hiding income and enriching himself through payments to dealerships in the Middle East.
Nissan had sacked him as chairman saying internal investigations revealed misconduct including understating his salary while he was its chief executive, and transferring $5 million of Nissan funds to an account in which he had an interest. (Reporting by Hideyuki Sano; Editing by Arun Koyyur)