Tokyo stocks fell Monday amid investor concerns about escalating tensions between Japan and China, and declines on Wall Street last week. The U.S. dollar was down against the yen and the euro.
The Nikkei Stock Average of 225 selected issues shed 129.11 points, or 1.09 percent, to close at 11,745.64. The index rose 63.76 points, or 0.54 percent, Friday.
The dollar was trading at 108.42 yen at 3 p.m. Monday, down 0.23 yen from late Friday but above the 108.30 yen it bought in New York later that day.
Tokyo stocks took their cue from Wall Street, where the market declined Friday after oil prices fell for the fifth straight day, prompting investors to pocket recent gains.
Mining and marine transportation issues were hit Monday, including Nippon Mining Holdings Inc. and Sumitomo Metal Mining Co. fell, as well as Nippon Yusen K.K. and Mitsui O.S.K. Lines Ltd. Automakers Honda Motor Co. and Nissan Motor Co. also declined, along with tech stocks like Canon Inc. and Sony Corp.
Large anti-Japan protests in China over the weekend were also prompting concerns about the potential impact on the region's two largest economies.
Thousands of Chinese in Beijing took to the streets in protest with some throwing rocks at the Japanese Embassy on Saturday over a controversial new Japanese textbook that critics say whitewash Japan's colonial history.
"It's a risk factor" causing players to refrain from buying Japanese stocks aggressively, said Daiwa Securities strategist Kazuhiro Miyake.
In New York Friday, the Dow Jones industrial average fell 84.98, or 0.81 percent, to 10,461.34. The Nasdaq composite index lost 19.44, or 0.96 percent, to 1,999.35.
The broader TOPIX, which includes all issues on the Tokyo Stock Exchange's first section, lost 11.18 points, or 0.93 percent, to finish Monday's trading at 1,190.12 points. The TOPIX rose 4.47 points, or 0.37 percent, the day before.
In currency trading, the dollar slipped against the yen and the euro in Asia Monday as investors held back from aggressive buying before the release of U.S. trade deficit data and U.S. central bank's open market committee minutes on Tuesday.
While many believe the dollar will continue to find support from expectations of higher U.S. interest rates, some investors have opted to wait for the U.S. currency to weather downside risks, traders said.
"The broad trend is still for the dollar to strengthen on U.S. monetary policy expectations, but the dollar doesn't have the market's full trust just yet," said Masaki Fukui, senior vice president of foreign exchange at Mizuho Corporate Bank.
The market consensus is for the U.S. trade deficit to widen a bit to $58.3 billion in February from $58.27 billion in January. The data is usually interpreted together with U.S. Treasury International Capital Flows data, due on Friday, which will show if there was enough money flowing into the United States to fund its deficit.
Investors are also waiting for the minutes of the March 22 Federal Open Market Committee meeting to see the currency's direction.
Traders said the dollar was also slightly firmer against the yen due to weekend tensions between Japan and China weighing on the Japanese currency.
The euro rose to $1.2925 Monday afternoon in Tokyo from $1.2827 late Friday afternoon and to 140.16 yen from 139.40 yen.