TOKYO: Japan's Nikkei share average fell more than 2 percent to a fresh two-month low on Tuesday as Wall Street tumbled on fears that global economic weakness will weigh on US growth.
The Nikkei share average was down 1.6 percent at 15,054.90 by mid-morning trade after sinking 2.4 percent to 14,939.99 earlier, the lowest level since Aug. 8.
It also broke below its 200-day moving day average of 15,122.11.
Japanese markets were closed on Monday for a holiday.
Exporters led the declines hit by a stronger yen, while falling crude oil prices hurt such oil shares as Inpex Corp .
The International Monetary Fund's member countries on Saturday said bold action was needed to bolster the global economic recovery and they urged governments not to squelch growth by tightening budgets too drastically, although Germany poured cold water on the idea of a new global "crisis."
"Just a while ago, people were talking about the pace of US rate hikes. But at the G20 meeting last weekend, the focus was whether Europe may undercut US growth," said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.
"Whether the US market will enter a long-term correction is the main concern now. If it does, the Japanese market will likely follow suit."
Immediate technical support is seen at 14,753, the lowest intraday level market since Aug. 8, traders say.
"The selling we see is from Asia-based institutions," said a trader at a foreign brokerage, adding that long-only investors were staying on the sidelines.
But he said that when stock prices are low, investors have hopes that there may be buying by such funds as Japan Post Insurance, known as Kampo, the Government Pension Investment Fund (GPIF), as well as the Bank Of Japan's ETF buying.
The dollar crawled up 0.2 percent to 107.095 yen, but remained in close range of a one-month low of 106.76 hit earlier in the session.
Toyota Motor Corp sank 3.1 percent, Honda Motor Co dropped 2.1 percent and Panasonic Corp declined 2.3 percent.
Inpex fell 3.7 percent and Japan Petroleum Exploration dropped 2.4 percent after Brent oil prices tumbled more than $2 a barrel intraday to their lowest since 2010.
Takashimaya Co bucked the weakness, rising 2.0 percent after the department store hiked its full-year operating profit to 916 billion yen from 900 billion yen for the year through February.
The broader Topix shed 1.7 percent to 1,221.43, and the JPX-Nikkei Index 400 declined 1.6 percent to 11,123.11.
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