Japanese stocks fell the most in a month as China devalued its currency for a second day, heightening concern growth may slow in the world's second-largest economy and dampening the outlook for Japanese exporters.
Koito Manufacturing Co., which relies on China for about a quarter of its car headlight sales, dropped 3.6 percent. A measure of energy shares slumped the most since March as oil traded near a six-year low. Concerns that a weaker yuan would reduce spending by Chinese tourists sent retailers reeling, including J Front Retailing Co., which lost 4.1 percent.
The Topix index plunged 1.3 percent to 1,665.75 at the close in Tokyo, the biggest decline since July 8. The Nikkei 225 stock average sank 1.6 percent to 20,392.77. The yen soared by a record against the yuan in offshore trading, bringing its two-day gain to more than 5 percent.