Japan's Nikkei average lost 2.9 percent today for its worst one-day percentage loss in more than two months, with shares sold across the board amid investor worry about economic recovery as the yen advanced.
Mitsubishi and other resource shares took a hit as oil and metals prices extended losses, while property stocks slid on profit-taking after rallying for the past month.
The benchmark Nikkei fell below the hard-won 10,000 line, with some analysts saying technical factors were turning dark and the day's fall could turn out to be more than just a simple adjustment following recent sharp gains.
“The atmosphere is not particularly good, and there's a lot more pressure from outside factors, such as Asian share markets falling and the yen's advance,” said Hiroaki Osakabe, a fund manager at Chibagin Asset Management.
The dollar was fetching 96.26 yen, down 1.6 per cent, while the MSCI index of Asia-Pacific stocks outside Japan fell 1.8 per cent.
The Nikkei has fallen below an uptrend line from the March 10th bear market low as well as its five-day moving average. Should it keep falling, its next target could be a bit below 9,600, which is where the 25-day moving average currently comes in.
Others disagreed, saying a bit of adjustment is only natural given the market's recent rally. The Nikkei has risen roughly 40 per cent since its March low, about 11 per cent of that since the start of May.
The benchmark Nikkei lost 286.79 points to 9,752.88, pulling further away from an eight-month closing high of 10,135.82 reached on Friday, in its biggest one-day percentage fall since March 30th. The broader Topix dropped 3.4 per cent to 914.76.
"The selling is due to a combination of overheating and a sense of achievement after hitting 10,000," said Takashi Ushio, head of the investment strategy division at Marusan Securities.
Reuters