Japan’s Nikkei stock average fell below the psychological threshold of 38,000 for the first time this month, as the risk-on mood prevailed over concerns about U.S. and domestic economic growth.
Toyota Motor fell 2.1% due to continued fallout from a certification scandal, with auto-related stocks among the worst-performing sectors.
The Nikkei lost 1.9% to 38,814.56 at 0211 GMT, and at one point fell 2.2% to 37,956.49 for the first time since May 30.
Of the index’s 225 components, 203 fell, 20 rose and two remained stable.
The broader Topix index skidded 1.5%.
Each of the Tokyo Stock Exchange’s 33 industry groups fell, led by a 2.4% fall for the mining industry.
“Basically, the Nikkei has been on a sideways path for a long time, and now it’s being shaken a little bit by concerns about the economy – both in Japan and the United States,” said Kazuo Kamitani, an equity strategist at Nomura Securities, forecasting a correction that could go as high as 37,500.
The Nikkei has moved about 500 points either side of 38,500 since the end of April, after hitting a record high of 41,087.75 on March 22 and falling to 36,733.06 a month later.
Meanwhile, automakers and suppliers lost 2.3% on Monday.
National broadcaster NHK reported that Toyota would extend the production halt of affected models for at least another month, until the end of July.
Toyota board chairman and family scion Akio Toyoda faces a vote against his re-election at Tuesday’s annual shareholder meeting.
Suzuki Motor fell 3.8% and Mazda lost 3.4%. (Reporting by Kevin Buckland; Editing by Sonia Cheema)
