Stock market: Japan's Nikkei 225 closes down almost 5% after huge losses on Dow Jones

US benchmark S&P 500 fell by more than 4 per cent on Monday while the Dow Jones Industrial Average tumbled 4.6 per cent

A pedestrian stands in front a stock market indicator board in Tokyo, Japan, 6 February 2018 (EPA)

A massive sell-off across US stock markets on Monday sparked a plunge in Asian shares on Tuesday, with traders citing inflation fears after strong US jobs data at the end of last week triggered a surge in bond yields.

Japan’s Nikkei 225 tumbled 4.7 per cent, marking its worst fall since November 2016 and taking it down to a four-month low.

The US benchmark S&P 500 fell by more than 4 per cent while the Dow Jones Industrial Average lost 4.6 per cent on Monday. Those represented the indices’ largest percentage drops since August 2011.

According to Reuters, before that fall, the US stock market had not seen a decline of more than 5 per cent during more than 400 trading sessions. Analysts said that had been the longest such streak in history.

“Since last autumn, investors had been betting on the goldilocks economy - solid economic expansion, improving corporate earnings and stable inflation. But the tide seems to have changed,” Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities, told the agency.

Top Japanese officials on Tuesday sought to downplay concerns about plunging share prices, pointing to strong growth and corporate earnings as reasons for calm.

Toshimitsu Motegi, an economy minister, said he was watching market movements closely but that the economy was stable and improving.

Hong Kong's Hang Seng index fell 4.1 per cent and the Kospi in South Korea lost 1.4 per cent.

Additional reporting by newswires