Nikkei falls to new 17 year low

Tokyo stocks have closed sharply lower, with the market's main index extending its 17-year-low amid worries about the global economy.

The benchmark 225-issue Nikkei Stock Average closed down 321.10 points, or 3.05%, to 10,195.69. It was well below the index's finish on September 3 at 10,409.68, on that day its lowest close since August 14, 1984, when it ended at 10,360.92.

On Friday, the average closed down 133.54 points, or 1.25%.

The Nikkei index moved lower with selling led by banking issues and technology stocks, following Wall Street's sharp retreat Friday after worse-than-expected US unemployment data.

During trading Monday, the Nikkei 225 had recovered slightly from early declines but plunged in the final 30 minutes of trading.

The Labor Department announced Friday that the U.S. unemployment rate soared to 4.9% in August - its highest level in nearly four years - and businesses slashed 113,000 jobs as the slumping economy continued to hammer the jobs market.

The unemployment data sparked fears of a drawn-out global economic slowdown.

Yasuo Fukuda, Japan's top Government spokesman, said the Tokyo market's decline was hurt by weak stock markets overseas and that current stock prices did not reflect Japan's economic fundamentals.

"Personally, I doubt if it reflects Japan's economic situation," Mr Fukuda told a regular news conference. "We have to watch the situation calmly," he said.