Domestic political turmoil following the resignation of Japan's foreign minister to take responsibility for accepting illegal donations from a foreign resident added to the downbeat tone, dealers said.

The Nikkei index of the Tokyo Stock Exchange fell 141.73 points to 10,551.93. The Topix index of all first section shares slipped 1.10 percent, or 10.51 points, to 945.08.

Oil gained in Asian trade Monday with the benchmark New York contract surging past $105, a new two-year high as turmoil in the Middle East continued to unsettle investors, analysts said.

The wave of social unrest sweeping the Middle East and North Africa was expected to keep Tokyo shares under pressure, analysts said, on fears rising oil prices will depress a global economic recovery.

"Oil prices need to stabilise while the global economy is still relatively firm, but time is running out," Okasan Securities Strategist Hideyuki Ishiguro said, adding that a continuing surge would pressure corporate earnings.

Honda Motor was off 3.10 percent at 3,435 yen on concerns higher petrol prices will erode auto demand.

Toyota Motor was off 2.9 percent at 3,675, also hit by Standard & Poor's downgrade of its bond rating to "AA-" from "AA" on concerns over the automaker's profitability.

Other exporters were also lower. Canon was down 2.16 percent at 3,850 and Sony was off 1.57 percent at 2,931.

Sentiment was also downbeat following the resignation of foreign minister Seiji Maehara for receiving $3,000 in donations from a foreign resident of Japan in violation of the law, dealing a fresh blow to the government.

"There is caution over the risk of a (further) downgrade of Japan's sovereign debt rating if political uncertainty deepens," Hisatsune Kobayashi, senior market analyst at Nikko Cordial Securities, told Dow Jones Newswires.

US stocks fell on Friday as Middle East turbulence and the resulting high oil prices trumped positive economic news going into the weekend.

The Labor Department reported a surge in new jobs in February 192,000 in total and a drop in the unemployment rate to below nine percent for the first time in almost two years.

But analysts said markets had anticipated this and profit-taking took root with the actual news, along with caution over the continuing Libyan conflict.