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Tokyo - Tokyo stocks fell 3.08 percent on Tuesday, hit by a stronger yen and tracking heavy losses on Wall Street after weaker-than-expected US jobs data.
The benchmark Nikkei-225 index lost 489.66 points to 15,422.40 while the Topix index of all first-section issues was down 2.26 percent, or 29.40 points, to 1,269.08.
“Selling pressure accelerated in afternoon trade after players took notice of the bearish sentiment in the morning,” said Katsuhiro Kondo, a broker at Tokai Tokyo Securities.
“This is part of the recent profit-taking resulting from the sizeable gains late last year. But a sense of overheating may end with today's plunge because there is no change in economic fundamentals,” he added.
The Nikkei posted a strong run in the last couple of months of 2013 as it surged 57 percent through the year - its best annual performance since 1972.
On Friday, the US Labor Department said the world's biggest economy added a mere 74,000 jobs in December, well below the consensus estimate of 197,000.
The news fuelled speculation the Federal Reserve would delay a further reduction in its stimulus programme, a negative for the dollar.
Japan's markets were closed Monday for a national holiday.
“The jobs data came in so far below expectations that a sharp knee-jerk market reaction is natural, especially considering how far the dollar has fallen,” said Monex market analyst Toshiyuki Kanayama.
The dollar was changing hands at 103.33 yen Tuesday afternoon, up from 102.98 yen in New York Monday afternoon but still sharply down from levels near 105 yen in Tokyo on Friday.
“The selling is unlikely to have a long-lasting effect on market sentiment, but could lead to a more thorough shakeout of what has been a very bullish two-month period,” Kanayama told Dow Jones Newswires.
On Wall Street Monday the Dow fell 1.09 percent, the S&P 500 shed 1.26 percent and the Nasdaq lost 1.47 percent.
Adding to the downward pressure on Japanese stocks was news that the country's current account deficit widened to a record $5.7
billion in November owing to a weak yen pushing up energy import bills.
Japan has since 2011 had to depend on importing pricey fossil fuels to generate electricity, after the country's nuclear reactors were shut down in response to the 2011 tsunami-sparked Fukushima atomic disaster.
In share trading, Sony fell 2.28 percent to 1,793 yen, Toyota was down 2.32 percent to 6,144 yen, while Canon lost 0.77 percent to finish at 3,210 yen.
Suntory Holdings' food and beverage unit rose 0.30 percent to 3,290 yen after the parent company announced plans to buy the US maker of Jim Beam bourbon for $16 billion. - Sapa-AFP