TOKYO: Tokyo stocks closed sharply lower on Monday, taking a negative lead from New York where unease over the US-China trade war prompted a fresh sell-off late last week.

The benchmark Nikkei 225 index lost 2.12 percent or 459.18 points to end at 21,219.50, while the broader Topix index was down 1.89 percent or 30.64 points at 1,589.81.

On Friday, major US stock indices slumped more than two percent to conclude a bruising week for markets rattled by the US-China trade clash.

The Dow Jones Industrial Average ended down 2.2 percent and the broad-based S&P 500 slumped 2.3 percent.

The declines followed hawkish comments from White House trade advisor Peter Navarro, who told CNN that US President Donald Trump would “simply raise" tariffs on $200 billion worth of Chinese goods if trade talks fail.

Mutsumi Kagawa, chief global strategist at Rakuten Securities, said “the market sentiment is down due to the ‘Huawei Shock'", referring to a furore kicked off by the arrest in Canada of the firm's chief financial officer.

China summoned the US ambassador on Sunday to protest the arrest of Huawei CFO Meng Wanzhou in Canada, and demand Washington drop its extradition request.

“The arrest indicated the United States is taking a very tough stance broadly against China, including on security issues," he said.

“A lot of companies supply to the Huawei group."

Washington's top trade negotiator rejected suggestions that the case could affect talks aimed at settling a trade war.

The dollar traded at 112.44 yen in Asian trade, down from 112.68 yen in New York late Friday and 112.86 yen in Tokyo.

Nissan dropped 2.90 percent to 945 yen after ousted chairman Carlos Ghosn was charged and faced new allegations for alleged financial misconduct.

Steelmakers slumped on concerns over a US-China trade war. Nippon Steel & Sumitomo Metal lost 1.15 percent to 1,962.5 yen with JFE Holdings down 1.37 percent at 1,898.5 yen.

Copyright AFP (Agence France-Press), 2018