Japan's Nikkei share average slumped on Monday to the lowest level in 1-1/2 years, with the index of Japanese bank stocks diving more than 17% at one point, as concerns over a tariff-induced global recession continued to rip through markets.

The Nikkei dropped as much as 8.8% to hit 30,792.74 for the first time since October 2023, before ending the day down 7.8% at 31,136.58. All 225 component stocks of the index finished in the red.

The broader Topix sank as much as 9.6% before closing down 7.8%.

Speaking on Sunday aboard Air Force One, U.S. President Donald Trump characterized his latest round of sweeping tariffs as "medicine", and signalled a willingness to accept the market rout.

Since Trump revealed the more-aggressive-then-anticipated levies last week, the Nikkei has tumbled 11.6% and the U.S. S&P 500 has dropped 10.6%.

"It's extremely difficult to judge how far this stock market correction will run (but) as long as there exists a lack of clarity around tariffs and each country's response, the market will remain heavy," said Maki Sawada, an equities strategist at Nomura Securities.

At the same time, "the market currently is only pricing in bad news", so if there are signs of flexibility on trade policies or the announcement of economic support measures, "it's highly likely we'll see a bottom form in the market," Sawada said.

A Topix index of banking shares slumped as much as 17.3% before recovering slightly to finish the day down 10%.

Banks have borne the brunt of the sell-off in Japanese equities, losing nearly a quarter of their combined value over the past three sessions, as recession worries compressed bond yields and push out bets for further interest rate hikes by the Bank of Japan.

Source: Investing.com