The Nikkei index dived more than 5 percent to its lowest level in about one month on Thursday in Tokyo, ending below 13,600 amid jitters over recent market volatility and concern over the course of the global economy.
The 225-issue average closed down 737.43 points, or 5.15 percent, from Wednesday at 13,589.03, the lowest closing level since April 23, after sinking to as low as 13,555.66. It logged the second-biggest point fall so far in 2013. The broader Topix index of all first section issues on the Tokyo Stock Exchange ended down 44.45 points, or 3.77 percent, at 1,134.42.
"Once a jittery mood spreads, it does not recede so easily," said Takashi Hiroki, chief strategist at Monex Inc., noting investors have been nervous about wide swings since May 23, when the Nikkei tumbled more than 7.3 percent, or over 1,100 points.
In the past week, the Nikkei retreated more than 2,000 points, or nearly 15 percent from its highest level in about five years and five months at 15,627, amid a massive selloff triggered by futures-led trading.
Players also grew risk-averse after the Organization for Economic Cooperation and Development said Wednesday in its economic outlook that the world economy is forecast to grow 3.1 percent this year, down from 3.4 percent projected in November, brokers said.
"The downgrading of the economic outlook by the OECD and fresh talk about tapering of U.S. quantitative easing was a bad combination for the U.S. stock market and affected the Japanese bourse," said Tsuyoshi Nomaguchi at Daiwa Securities Co.
Hiroki also said selling accelerated amid concern over Japan's fiscal health, after Shigeru Ishiba, secretary-general of the Liberal Democratic Party, noted the possibility of deferring the planned sales tax hike next April.