The Nikkei average sank over 2 per cent on Tuesday to close below 8,000 for the first time in 20 years as investors failed to see any effective government steps to turn around a market that fears war in Iraq is near.
Several blue-chip exporters, including Sony Corp, extended recent losses and insurance firms were among the hardest hit as their earnings are seen as particularly vulnerable to geopolitical risk.
The Nikkei average finished down 2.24 per cent or 179.83 points at 7,862.43, its day's low and the lowest close since January 1983.
The broader TOPIX index was down 1.77 per cent at 770.62.
Consumer electronics giant Sony was down 2.86 per cent at 4,080 yen and Millea Holdings Inc, Japan's top non-life insurance firm, was down 4.07 per cent at 707,000 yen.
