Tokyo's benchmark stock index plunged 3.8 percent Monday morning, its biggest one-day drop in more than 11 months, because of investor concerns about anti-Japanese protests in China and recent declines on Wall Street.
The Nikkei Stock Average of 225 selected issues closed down 432.25 points, or 3.80 percent, to end at 10,938.44 points — its lowest point since Dec. 16 when it closed at 10,024.37. The index lost 192.48 points, or 1.66 percent, Friday.
It was the Nikkei's single largest one-day drop since May 10, 2004, when the index lost 554.12 points.
Investors are increasingly becoming nervous about the U.S. stock outlook and China-Japan tensions, said Shinko Securities equity strategist Tsuyoshi Segawa.
Even when the Nikkei lost 14 percent between April and May last year, "situations surrounding the market...weren't as uncertain as they are now," Segawa told Dow Jones Newswires.
Massive anti-Japanese protests have swept across China this month, damaging Japanese diplomatic buildings and vandalizing businesses fueled by anger over Japan's wartime aggression and anxieties about Tokyo's military and diplomatic ambitions.
Fears have emerged about the possible impact on Asia's two largest economies, which are closely linked by trade and investment.
Japan's top government spokesman expressed concern about the plunge.
"It is possible concerns about Japan's relations with neighboring countries may have been (one) reason for the decline. We need to keep watching the development until things become stable," said Chief Cabinet Secretary Hiroyuki Hosoda Monday.
In New York Friday, deepening concerns over economic growth and higher prices led to the worst week of trading since August.
The Dow Jones industrial average fell 191.24, or 1.86 percent, to 10,087.51 _ its lowest close since Nov. 2. With Friday's losses, it was also the first time the Dow lost 100 points three sessions in a row since late January 2003.
The Nasdaq composite index dropped 38.56, or 1.98 percent, to 1,908.15 for its worst showing since Oct. 25.
