Japanese shares on Thursday tracked overnight losses on the Wall Street, as economic damage from COVID-19 weighed on investor sentiment, with banks and automakers leading the declines.

The benchmark Nikkei average ended 1.3% lower at 19,290.20. The Nikkei's volatility index, a measure of investors' volatility expectations based on option pricing and considered to be a fear gauge, rose 8.6% to 39.36.

Taking a cue from this, Tokyo-listed banks fell, with Mitsubishi UFJ Financial Group (MUFG) Inc, Sumitomo Mitsui Financial Group (SMFG) Inc and Mizuho Financial Group Inc shedding between 2.1% and 3.3%. The broader Topix fell 0.8% to 1,422.24, with two-thirds of the 33 sector sub-indexes on the Tokyo exchange finishing lower.