The key Nikkei stock average on Tuesday closed below 7,900 for the first time in 20 years amid growing concerns about the likelihood of war in Iraq.
The Bank of Japan reacted by pumping 1 trillion yen into financial institutions through its money market operations. The central bank's move is intended to support the banking system, which is becoming increasingly vulnerable to stock falls ahead of March 31 book closings.
The 225-issue Nikkei average lost 179.83 points -- or 2.24 percent -- to close at 7,862.43, marking its sixth straight day of decline and its lowest level since Jan. 25, 1983, when the index finished at 7,803.18.