Tokyo stocks plunged Tuesday, with the Nikkei suffering its biggest one-day point fall in 3 months, led by the selling of bank-related issues amid concern over the U.S. financial system following the collapse of two regional U.S. banks.
The 225-issue Nikkei Stock Average ended down 610.92 points, or 2.19 percent, from Monday at 27,222.04, registering its steepest fall since Dec. 20. The broader Topix index finished 53.45 points, or 2.67 percent, lower at 1,947.54.
All industry categories except land transportation issues declined, led by bank, insurance and mining shares.
The U.S. dollar remained weak in the 133 yen zone and was weighed down by selling as, following the bank failures, the size of the interest rate hike by the U.S. Federal Reserve next week is expected to be smaller, dealers said.
At 5 p.m., the dollar fetched 133.54-56 yen compared with 133.18-28 yen in New York and 134.49-52 yen in Tokyo at 5 p.m. Monday.
The euro was quoted at $1.0688-0690 and 142.73-77 yen against $1.0727-0737 and 142.92-143.02 yen in New York, and $1.0725-0727 and 144.26-30 yen in Tokyo late Monday afternoon.
With investors turning to safer assets, the price of gold set by Tokyo's Tanaka Kikinzoku Kogyo K.K. rose to 9,050 yen ($68) per gram, hitting an all-time high for the second consecutive day, the major Japanese precious metal firm said.
On the stock market, investors continued unloading bank shares amid worries that any instability in the U.S. financial system could spill over to Asia, despite U.S. President Joe Biden's reassurances overnight that there is no cause for alarm, analysts said.
U.S. regulators took control of tech-focused lender Silicon Valley Bank on Friday, and Signature Bank, a big lender in the crypto sector, two days later.
"Foreign investors who bought a large number of Japanese shares last week were selling them to evade risks," said Yutaka Miura, senior technical analyst at Mizuho Securities Co.
A fall in Japanese long-term interest rates also fueled the selling of bank issues.
The yield on the benchmark 10-year Japanese government bond hit a four-month low of 0.240 percent at one point on Tuesday, as investors bought the safe-haven debt.
The bond fell 0.020 percentage point from Monday's close to 0.280 percent.
In the banking sector, Mizuho Financial Group plunged 143.5 yen, or 7.1 percent, to 1,867.0 yen and Mitsubishi UFJ Financial Group slid 77.3 yen, or 8.6 percent, to 823.0 yen. Sumitomo Mitsui Financial Group was down 429 yen, or 7.6 percent, at 5,240 yen.
Biden says U.S. financial system safe after 2 bank failures