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Tokyo - Tokyo's benchmark stock index dropped more than three percent Monday morning as Shanghai shares dived, swept lower in a global equities rout as worries about China's economy deepen.
The Nikkei 225 at the Tokyo Stock Exchange, which closed at its lowest level in over three months on Friday, plunged 623.34 points to 18 812.49 by the break as bank shares tumbled at Toyota lost more than 5.0%.
The broader Topix index of all first section shares shed 60.73 points to 1 512.28.
Tokyo's poor start came after New York shares plunged more than 3.0% on Friday.
In its worst single session in nearly four years, the Dow Jones Industrial Average lost more than 3.12%, while the broader S&P 500 gave up 3.19% and the Nasdaq Composite shed 3.52%.
Jitters over China and the global economy saw traders move into the yen - a safe haven in times of turmoil and uncertainty - which is a negative for Tokyo equities as it hurts the profitability of Japanese exporters.
The dollar dropped to ¥120.79, well down from ¥122.06 on Friday in New York and compared to ¥124 on Thursday in Asia.
The euro jumped to $1.1488 from $1.1386 in US trading, while the euro weakened to ¥138.70 from ¥138.97.
Investor jitters have spiked on concerns China's economy, Asia's biggest, is slowing more than previously thought after the central bank devalued the yuan in a shock move seen as a bid to boost sagging exports.
Equities worldwide have lost more than $5trn in value since the cut on August 11, which also spurred a slump in emerging-market currencies and commodities.
"Things are probably going to get worse before they get better," Nader Naeimi, Sydney-based head of dynamic asset allocation at AMP Capital Investors, told Bloomberg News.
"You really need rate cuts and more policy easing in China. In the meantime, things can get worse. We've got to see more clarity around the Fed" and its timeline for raising interest rates, he added.
The Federal Reserve voiced caution over China in the minutes of its last meeting, adding to pressure on the dollar by lowering expectations the US central bank could lift rates as early as next month.
Toyota finished the morning down 4.81% at 7 139.0 after falling more than 5.0% at one point. Losses accelerated after the auto giant said its biggest source of production in China will remain closed until Wednesday following this month's deadly explosions in the port city of Tianjin.
Nissan fell 3.91% to ¥1 066.5, while market heavyweight Fast Retailing, operator of the Uniqlo fashion chain, fell 2.22% to 51 010.0.
Bank shares also fell, with Mitsubishi UFJ dropping 6.74% to ¥760, while mobile carrier SoftBank fell 2.52% to 7 176.0.
