Japan's Nikkei dips below key 38,000-mark; Toyota drops

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.

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 worst performing 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 and one was flat.

The broader Topix skidded 1.7%.

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 a production halt for affected models by at least an extra month to 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%.