The Nikkei 225 average plunged Monday, closing below 22,000 for the first time since July 11 as a risk-averse mood grew amid Turkey’s financial crisis.
The Nikkei tumbled 440.65 points, or 1.98 percent, to 21,857.43 — its worst finish since July 6. It had sagged 300.31 points Friday.
The Topix, which covers all first-section issues on the Tokyo Stock Exchange, shed 36.66 points, or 2.13 percent, to 1,683.50 after dropping 20.00 points Friday.
Friday’s weakness in European and U.S. equities spilled over into Japanese stocks. Investor sentiment was also battered by the yen’s rise against the dollar, market sources said.
Monday’s plunge was driven by “futures-led selling from speculators,” said Ryuta Otsuka, a strategist in the investment information department at Toyo Securities Co.
Otsuka said the sluggishness of other Asian markets also pushed down the TSE’s key gauges.
Buybacks and buying supported by investors anticipating the Bank of Japan’s purchases of exchange-traded funds failed to support the market’s downside as trading was thin in the summer holiday season, said Yoshihiko Tabei, chief analyst at Naito Securities Co.
An official from a bank-linked securities firm suggested that the risk-off mood stemming from Turkey’s crisis may continue to batter global stock markets, possibly sending the Nikkei below 20,000 on an intraday basis within a month.
Falling issues far outnumbered rising ones 1,884 to 191 in the first section, while 28 issues were unchanged.
Volume totaled 1.523 billion shares, compared with 1.507 billion Friday.
Financial issues, including megabanks Mitsubishi UFJ, Sumitomo Mitsui and Mizuho, were downbeat after their European and U.S. peers fared poorly Friday.
Mitsui Mining & Smelting went limit-down before closing 14.10 percent lower after the nonferrous metal producer cut its April-September operating profit forecast Friday.
Other major losers included clothing retailer Fast Retailing and industrial robot producer Fanuc.
By contrast, Japan Post Holdings, staffing service company Recruit and automaker Suzuki attracted purchases.
In index futures trading on the Osaka Exchange, the key September contract on the Nikkei plummeted 410 points to 21,890.