The 225-issue Nikkei Stock Average ended down 229.33 points, or 0.77 percent, from Friday at 29,538.73. The broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 4.88 points, or 0.25 percent, lower at 1,954.59.

Decliners were led by marine transportation, nonferrous metal and consumer credit issues.

While the Nikkei extended its losses toward the end of the day, the US dollar edged down to around the mid-109 yen line as US stock futures slipped, dealers said.

At 5 p.m., the dollar fetched 109.45-46 yen compared with 109.60-70 yen in New York and 109.50-51 yen in Tokyo at 5 p.m. Friday.

The euro was quoted at $1.1872-1873 and 129.94-98 yen against $1.1896-1906 and 130.45-55 yen in New York and $1.1897-1899 and 130.27-31 yen in Tokyo late Friday afternoon.

The yield on the benchmark 10-year Japanese government bond rose 0.005 percentage point from Friday's close to 0.105 percent, as investors sold the debt following falls in the U.S. Treasury market late last week. Bond yields move inversely to prices.

"Investors (in the stock market) disliked the fact that Japan is extremely behind in terms of COVID-19 vaccinations among advanced countries," said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co. "The timing of business activities returning to normal would be delayed."

Although the Japanese government on Monday started vaccinating people aged 65 or over, more than 99 percent of the population has yet to receive a shot about two months after the start of the inoculation campaign.

Industrial machinery maker Yaskawa Electric's sharp fall also weighed down the market, as investors became vigilant toward Japan's upcoming earnings report season, Ichikawa said.

Yaskawa Electric tumbled 420 yen, or 7.1 percent, to 5,490 yen after it forecast a lower-than-expected net operating profit for the year through February 2022 on Friday.

Tokyo stocks had priced in that a number of companies would recover from the coronavirus fallout and their earnings figures for the business year ending in March 2022 would be solid.

Under such circumstances, brokers said, shares are prone to be sold if they do not beat market expectations, as happened to Yaskawa on Monday.

"Many firms may report better-than-expected earnings results, but the possibilities are high that they cannot meet investor expectations for the fiscal year (ending in March 2022) and that should be carefully watched," said Yutaka Miura, senior technical analyst at Mizuho Securities Co.

On the First Section, advancing issues outnumbered decliners 1,292 to 811, while 87 ended unchanged.

Aeon dropped 131 yen, or 4.1 percent, to 3,081 yen after the retailer reported its first annual net loss in 12 years and the highest deficit of 71.02 billion yen ($648 million) since going public.

Yaskawa Electric's rival Fanuc declined 495 yen, or 1.8 percent, to 27,600 yen.

Some sporting goods makers and retailers rose after Hideki Matsuyama won the Masters at Augusta National Golf Club on Sunday to become the first player from Japan to claim a men's major championship.

Mizuno climbed 39 yen, or 1.8 percent, to 2,254 yen. Major sports goods retailer Alpen gained 60 yen, or 2.4 percent, to 2,590 yen.

Trading volume on the main section declined to 954.29 million shares from Friday's 1,123.38 million shares.

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