The bluechip market - among the best-performing indices in 2015 - began 2016 with six straight losses for the first time after a Chinese equities sell-off sent shivers across global trading floors. "Investors are questioning when the weak yuan and the fall in Chinese shares will stop and concerns over the Chinese economy is worsening market sentiment," Toshihiko Matsuno, chief strategist at SMBC Friend Securities Co, told Bloomberg News shortly before markets opened Tuesday.
The Nikkei fell 2.71 percent, or 479.00 points, to 17,218.96, while the broader Topix index of all first-section shares lost 3.13 percent, or 45.37 points, to 1,401.95. Shanghai lost 5.3 percent on Monday while Wall Street ended with modest gains. Financial markets in Tokyo were closed on Monday for a national holiday.
Shortly before Tuesday's open in Tokyo, the government said Japan chalked up a current account surplus for the 17th straight month in November, providing support for Prime Minister Shinzo Abe's efforts to boost the world's number three economy. The excess in the widest measure of trade was 1.14 trillion yen in November, up from 440.2 billion a year earlier, the finance ministry said.
The dollar dropped against the yen, fetching 117.33 yen from 117.77 yen Monday in New York. The greenback has lost more than two percent against the yen so far this year - bad news for Japanese exporters whose overseas sales and repatriated profits benefit from a weaker yen. Toyota lost 1.58 percent to 6,755 yen, while Uniqlo-operator Fast Retailing, a market heavyweight, fell 1.33 percent to 37,630 yen, and Sony shed 5.29 percent to 2,675 yen. Energy explorer Inpex dropped 5.82 percent to 1,035 yen, while JX Holdings was down 5.60 percent at 441.6 yen. Retail giant Aeon slumped 9.97 percent to 1,602 yen after announcing Friday a loss in the third quarter.