Tokyo stocks plunged Monday, extending their losing streak to six days, on fresh worries over debt-laden property developer China Evergrande Group and disappoints over new Prime Minister Fumio Kishida apparently prioritizing factional interests over injecting fresh faces into his Cabinet.

The 225-issue Nikkei Stock Average ended down 326.18 points, or 1.13 percent, from Friday at 28,444.89, its lowest finish since Aug. 31. The broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 12.39 points, or 0.62 percent, lower at 1,973.92.

Decliners were led by marine transportation, electric appliance and glass and ceramics product issues.

The U.S. dollar was top-heavy at around the 111 yen line for most of the day as the unit faced selling pressure on receding hopes for a wider interest rate gap between the United States and Japan after U.S. Treasury yields declined late last week, dealers said.

At 5 p.m., the dollar fetched 111.16-18 yen compared with 111.03-13 yen in New York and 111.26-27 yen in Tokyo at 5 p.m. Friday.

The euro was quoted at $1.1609-1610 and 129.05-09 yen against $1.1589-1599 and 128.70-80 yen in New York and $1.1578-1580 and 128.82-86 yen in Tokyo late Friday afternoon.

The yield on the benchmark 10-year Japanese government bond fell 0.005 percentage point from Friday's close to 0.045 percent, as investors sought the safe-haven debt following a tumble in the stock market, dealers said.

Shares initially opened higher, tracking gains in U.S. shares late last week, after American pharmaceutical firm Merck & Co. said a clinical trial demonstrated its coronavirus treatment drug reduced the risk of hospitalization or death, brokers said.

But the Nikkei index quickly gave up its advances and extended losses, declining for the sixth consecutive day for the first time since July last year, as a reported lineup of Cabinet ministers under the Kishida government failed to raise market's expectations of economic reforms.

"Disappointment over the incoming Kishida Cabinet continued to drag down the market after the public favorite Mr. Kono lost the LDP leadership race in the face of factional logic," said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities Co.

Tokyo shares had surged on hopes that former vaccination minister and pro-reform Taro Kono would succeed former Prime Minister Yoshihide Suga, but Kishida's new Cabinet "lacked freshness and reduced hopes of a political regeneration," Fujito said.

Many market participants were also becoming wary of Kishida's economic policies which include redistribution of wealth such as by possibly raising the tax rate on profits from sales of shares, Fujito said.

Some issues with large exposure to the Chinese market were lower as worries over the Chinese economy were fueled by media reports that shares in China Evergrande Group and its unit Evergrande Property Services Group have been suspended from trading in Hong Kong, brokers said.

Toilet manufacturer Toto dropped 170 yen, or 3.2 percent, to 5,120 yen, Ryohin Keikaku, operator of retail brand Muji, sagged 45 yen, or 1.8 percent, to 2,398 yen and Uniqlo casual clothing chain operator Fast Retailing declined 750 yen, or 0.9 percent, to 78,270 yen.

Shipping firms were also lower as trading demand was expected to fall amid concerns over a slowdown in China's economic growth.

Nippon Yusen sank 670 yen, or 8.1 percent, to 7,630 yen, Mitsui O.S.K. slid 540 yen, or 7.2 percent, to 6,970 yen and Kawasaki Kisen tumbled 490 yen, or 8.4 percent, to 5,330 yen.

On the First Section, declining issues outnumbered advancers 1,229 to 872, while 82 ended unchanged.

Trading volume on the main section came to 1,324.33 million shares from Friday's 1,384.43 million shares.

==Kyodo

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