Japanese shares dropped on Monday, as investors grew nervous about a prolonged U.S.-China trade war, with a stronger yen also dragging down exporters like Panasonic and Daikin.

The Nikkei share average shed 2.4% by the midday break, extending Friday's 2.1% slide, to 20,590.87, its lowest level since June 4.

The rapidly strengthened yen during Asian trading also soured sentiment and dragged down exporters, with Nissan dropping 4.8%, Panasonic down 3.5% and Daikin Industries slipping 3.9%.

On the currency market, the yen gained as much as 0.8% to 105.80 yen to the dollar, after the Chinese yuan tumbled past 7 per dollar to a record low in offshore trading. All else being equal, a stronger yen hurts on Japanese exporters' profits.

The broader Topix lost 2.4% to 1,496.61, its loweset level in two months, by the midday break.

Source : Reuters