The 225-issue Nikkei Stock Average finished 607.87 points, or 2.13 percent, lower from Friday at 27,937.81, its lowest closing level since Dec. 6.
The broader Topix index of all First Section issues on the Tokyo Stock Exchange closed 43.14 points, or 2.17 percent, lower at 1,941.33.
Trading volume on the main section decreased to 1,142.33 million shares from Friday's 1,440.02 million shares.
The U.S. dollar against the Japanese yen remained weak in the mid-113 yen range as the Japanese currency was bought as a safe asset on renewed fears over the new Omicron variant, which has been detected in about 90 countries and regions, dealers said.
Tracking the declines in the U.S. market late last week, Tokyo stocks opened low from the outset, and the market extended losses in the afternoon on worries over the impact of the Omicron variant on the global economy, especially after European countries saw a surge in infections late last week.
"There is usually movement of people in both the United States and Europe for Christmas, so market participants are selling on fears that it may lead to a surge in infections," Yutaka Miura, a senior technical analyst at Mizuho Securities Co., adding that drops in U.S. stock futures also weighed on market sentiment.
By the close of play, all sectors lost ground with securities house, mining, and rubber product firms leading the plunge. Declining issues outnumbered advancing ones 2,051 to 115 on the First Section, while 18 finished unchanged.
Air and land transportation companies faced selling amid rising worries over the spread of infections. Among them, Japan Airlines fell 2.2 percent, while railway operators Tobu Railway and Keio ended down 0.5 percent and 1.4 percent, respectively.
At the same time, pharmaceutical company Eisai fell 1.4 percent after the European Medicines Agency adopted a negative tone on giving marketing authorization for its Alzheimer's drug jointly developed with U.S. biotech giant Biogen Inc.
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