TOKYO: Japanese shares fell on Monday, dragged by concerns of slow economic growth due to the Delta coronavirus variant, while Toyota Motor and Sony Group slid after the yen strengthened.

The Nikkei share average dropped 1.86% to 27,455.43 by 0213 GMT, while the broader Topix fell 1.71% to 1,922.95.

"Japan is still lagging behind the United States and Europe in taking measures against COVID-19, including vaccinations. That could lead to a downturn in the economy," said Norihiro Fujito, chief investment strategist, Mitsubishi UFJ Morgan Stanley Securities.

"And the worse-than-expected outcome of the University of Michigan's consumer survey indicated an impact of the Delta variant in the US and that weakened the dollar."

The survey, released last week, showed consumer sentiment slid to the lowest level since 2011 amid an acceleration in COVID-19 infections caused by the fast-spreading Delta variant.

Tokyo is already under a state of emergency, the fourth so far in the pandemic, though some experts have said it should be expanded to cover the whole country as the number of new infections remain at a record level.

Tokyo stocks open lower on virus worries

Meanwhile, data showed on Monday Japan's economy rebounded more than expected in the second quarter, but many analysts expect growth to remain modest in the current quarter as state of emergency curbs were reimposed.

Export-focused Toyota Motor fell 1.61%, while Honda Motor slipped 1.43%. Sony Group lost 2.33%.

Fujifilm Holdings jumped 7.32% after the medical equipment maker raised its annual operating profit outlook by 20.9%.

Citizen Watch rose 7.31% after the watch maker returned to profit in the quarter ended June.