Tokyo stocks plunged Monday, with the Nikkei index briefly losing over 2 percent, as selling was fueled by concerns over the European economy amid political turmoil and caution over the U.S. economic outlook.
The 225-issue Nikkei Stock Average ended down 712.12 points, or 1.83 percent, from Friday at 38,102.44. The broader Topix index finished 46.60 points, or 1.70 percent, lower at 2,700.01.
On the top-tier Prime Market, decliners were led by real estate, oil and coal product and mining issues.
The U.S. dollar was largely flat mostly in the lower 157 yen range in Tokyo amid few fresh trading cues.
On the stock market, a risk-off mood prevailed after European shares fell last week amid signs that French President Emmanuel Macron's position could be threatened by the far right in upcoming parliamentary elections, brokers said.
Sentiment was also dampened after a U.S. consumer sentiment index in June unexpectedly fell to a seven-month low, reducing hopes for a soft landing in its fight against inflation in the world's largest economy, brokers said.
"Trading on Japanese stocks is especially sensitive to developments in the global economy," said Toshikazu Horiuchi, equity strategist at IwaiCosmo Securities Co. "They may have been hedged amid uncertainty about future developments abroad," he added.
Among notable decliners, Toyota Motor slumped after the auto giant said Friday it will continue to suspend production until the end of July on three models for which certifications were obtained improperly amid the lingering impact of a vehicle testing scandal that also engulfed other major automakers.
Mitsubishi UFJ Financial Group also sank after Japan's securities watchdog recommended to the Financial Services Agency that a bank and two brokerage firms under the group be punished for sharing clients' confidential information without consent.
