TOKYO: Japan’s Nikkei share average dropped below the psychologically key 38,000 level for the first time this month on Monday, as a risk-off mood prevailed amid concerns about economic growth both at home and abroad.

Toyota Motor slid 2.6% amid continued fallout from a certification scandal, with car-related shares among the worstperforming sectors.

The Nikkei ended the day down 1.8% at 38,102.44, after earlier falling as much as 2.2% to 37,956.49 for the first time since May 30.

Of the index’s 225 components, 199 fell, while 25 rose andone was flat.

The broader Topix skidded 1.7%.

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Almost all of the Tokyo Stock Exchange’s 33 industry groups declined, led by a 3.5% slump for real estate. Only pharma managed a slight gain.

“Basically, the Nikkei has been tracking pretty much sideways for a long time, and now it’s being shaken a little by some worries about the economy,” in Japan, the United States and Europe, said Kazuo Kamitani, an equities strategist at Nomura Securities, projecting a correction could run as far as 37,500.

The Nikkei has mostly fluctuated some 500 points either side of 38,500 since late April, after hitting a record peak at 41,087.75 on March 22 and then dropping back as far as 36,733.06 a month later.

Automakers and suppliers shed 2.6% on Monday.

National broadcaster NHK reported that Toyota would extend aproduction halt for affected models by at least an extra monthto the end of July.

Toyota Chairman and family scion Akio Toyoda faces a vote against his re-election at an annual shareholder meeting on Tuesday.

Suzuki Motor dropped 3.6% and Mazda lost 3.7%.

Chip-related shares also retreated, with Tokyo Electron off 2.5% and Advantest tumbling 3.7%.