TOKYO, Japan -- Japan's Nikkei average fell 1.2 percent on Monday to a 26-year closing low, weighed down by a slide in other Asian bourses and automaker losses amid concerns about the fate of General Motors.
Shares of Takeda Pharmaceutical Co., Japan's largest drug maker, plunged 13.1 percent after US regulators said they needed more data before approving a key Takeda drug candidate, raising fears the drug may be delayed by years.
Investors were keen to see the outcome of a meeting between the US auto task force, GM, Chrysler and officials from the United Auto Workers in Detroit this week after auditors raised doubts about GM's ability to survive outside bankruptcy.
"It's hard to pick up automakers as nobody really knows what is going to happen with GM and as nothing concrete has been unveiled," said Hiroaki Kuromachi, chief equity marketing officer at Tokai Tokyo Securities.
In addition to concerns about the fate of General Motors, global financial concerns kept investors in check.
"Worries about the financial system haven't gone away. Some hedge funds seem to have been shifting money to assets such as gold from equities," Kuramochi at Tokai Tokyo Securities said.
The benchmark Nikkei fell 87.07 points to 7,086.03, its lowest close since October 1982.
The broader Topix slipped 1.5 percent to 710.53, a fresh 25-year low.
Market watchers said losses on Hong Kong's Hang Seng Index, which was down more than 2.0 percent, helped drag the Nikkei lower. SMBC Friend Securities' Fumiyuki Nakanishi said the drop in Hong Kong shares may mean Wall Street comes under selling pressure later in the day, too.
He said Tokyo stocks were also hurt by a slight appreciation in the yen and political uncertainty at home.
The market's focus is on whether the Nikkei can hold above 7,000 after its index went as low as 7,028.49 on Monday.
"Expectations that the government will have to take steps to support the stock market have increased with the Nikkei nearing 7,000," said Naoki Koga, a senior fund manager at Toyota Asset Management.
Trade was light on the Tokyo exchange's first section, with 1.7 billion shares changing hands, below last week's daily average of 2.0 billion.
REVERSE GEAR
Automakers fell as Honda Motor shed 2.1 percent to 2,105 yen and Toyota Motor Corp. slid 0.3 percent to 2,890 yen.
Five-year credit default swaps on Honda Motor were quoted at 300-380 basis points earlier on Monday, traders say, sharply up from bids of 270 points seen on Friday. Swaps prices reflect the cost of what investors pay to protect themselves from the risk of a company defaulting on its debt.
Other exporters including tech stocks declined on the gloomy US jobs data released on Friday. Canon Inc. slipped 1.4 percent to 2,160 yen.
Worries about the US financial sector and concern that some banks may be nationalized weighed on Japanese banks.
Mitsubishi UFJ Financial Group, the top lender, lost 5.0 percent to 381 yen and number two Mizuho Financial Group retreated 3.4 percent to 170 yen.
Among gainers, Inpex climbed 4.5 percent to 648,000 yen after oil rose more than 2.0 percent to near $47 a barrel on Monday amid optimism that OPEC would cut output again at this month's meeting.
Falling stocks outnumbered advancing ones more than 2 to 1.
