Japanese shares slide most in almost four months on US economic concerns
The Nikkei 225 Index of shares sank 1.8 per cent and was set for its steepest decline since April 11. The broader Topix declined 1.5 per cent, with a sub-index of bank stocks plunging 4.2 per cent.
US shares fell sharply on Friday after data showed that the world's largest economy created fewer jobs than expected in July and a new round of punishing US tariffs cast a shadow on global trade.
On the home front, speculation grew that Prime Minister Shigeru Ishiba might resign after last month's election defeat.
Ishiba has consistently denied plans to step down after his ruling coalition lost its majority in the upper house of parliament, but pressure from within his Liberal Democratic Party is mounting.
"We had very weak job market data in the US and sentiment among investors has darkened," said Kenji Abe, chief strategist at Daiwa Securities.
"There is some chance that Prime Minister Ishiba may be forced to step down, so I think that's one thing we should watch."
There were 34 advancers on the Nikkei against 189 decliners. The biggest loser was Credit Saison with a drop of 8.2 per cent, followed by Yamaha, which sank 7.9 per cent.
The US Labor Department said the country added 73,000 nonfarm payrolls last month, below economists' expectations, while June's job growth was revised sharply lower.
Tariffs that US President Donald Trump imposed last week on dozens of countries are likely to stay in place rather than be cut as part of continuing negotiations, Trade Representative Jamieson Greer said.
The tariffs include a 35 per cent duty on many goods from Canada, 50 per cent for Brazil, 25 per cent for India, 20 per cent for Taiwan and 39 per cent for Switzerland.
Among the few gainers on the Nikkei, chip maker Socionext rose the most, up 3.9 per cent, followed by optics company Hoya , which advanced 2.7 per cent.
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