Stocks in Asia plummeted Monday, with investors nervous about the U.S. economy and the rising tensions between the region's economic giants - Japan and China.
A massive sell-off in Japanese stocks sent the Nikkei index tumbling to a four-month low. The index fell more than three percent, dropping to 10,938.
In Hong Kong, the Hang Seng index dropped two percent while South Korean stocks fell 2.3 percent.
Analysts say investors across Asia are worried about the impact a series of anti-Japanese protests in China will have on relations between the two regional economic powers.
Chinese protesters damaged Japanese diplomatic missions and businesses during the past week, angry over Japan's alleged whitewashing of its 20th century aggression in new school textbooks and its campaign for a permanent seat on the U.N. Security Council.
"For the near term, I would say the China factor should be the negative factor for Japanese companies with higher exposures to the Chinese market and I think looking at what's been happening over the weekend in China, that risk seems to have spread a little bit more than we initially thought it would," said Yukari Sato, an economist at the Credit Suisse First Boston bank in Tokyo.
China is Japan's biggest trading partner.
Analysts say investors are also reacting to a Wall Street sell-off last Friday on concerns over the weaknesses in the U.S. economy and corporate earnings.