Updates with mid-day closing prices
TOKYO, Feb 3 (Reuters) - Japanese shares fell more than 2% on Monday, with automakers leading the decline, as concerns over the global economy mounted following U.S. President Donald Trump's tariffs on Canada, Mexico, and China. The Nikkei .N225 was down 2.42% at 38,612.96 at the midday break, while the broader Topix .TOPX dropped 2.25% to 2,725.91.
The White House said the United States would impose 25% tariffs on Canada and Mexico, and China with a 10% levy. Canada and Mexico immediately vowed retaliatory measures, and China said it would challenge Trump's levies at the World Trade Organization.
"Japanese stocks fell amid uncertainties about the global economic outlook, which includes worries that Japanese exports may be a target of Trump's tariff policy in the future," said Kentaro Hayashi, senior strategist at Daiwa Securities.
"Also, if prices rise in the U.S. and the dollar strengthens, yields will rise. That may affect Japan's monetary policy."
Automakers slumped, with Toyota Motor 7203.T losing 5.53% to drag the Topix the most. Honda Motor 7267.T fell 7.1% and Nissan Motor 7201.T lost 5.28%, with strategists saying their auto production in Mexico is bigger than their Japanese peers.
In contrast, Suzuki Motor 7269.T, which pulled out of the United States, posted only a marginal loss of 0.27%.
"If automakers face higher tariffs, they would have to raise prices and their competitiveness might be hurt," said Fumio Matsumoto, chief strategist at Okasan Securities.
All of the Tokyo Stock Exchange's 33 industry sub-indexes fell, with automaker .ITEQP.T shedding 5.25% to become the worst performer.
The Nikkei volatility index .JNIV rose to its highest level since mid-December at 25.33 and was last at 24.78.
Shares of video game developer Konami Group 9766.T jumped 13.62%.
Scandal-hit Fuji Media Holdings 4676.T surged 11.48%.
Of the more than 1,600 stocks trading on TSE's prime market, 87% fell and 11% rose, with 1% trading flat.
(Reporting by Junko Fujita; Editing by Subhranshu Sahu and Sherry Jacob-Phillips)
((junko.fujita@thomsonreuters.com;))
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