Tokyo stocks slump more than 3% at open

Tokyo stocks slumped at the start of trade Monday as a stronger yen and a powerful weekend earthquake hurt exporters and crude prices tumbled after the world's top oil producers failed to reach an agreement on capping output.

Shares in major manufacturers were off sharply after market sentiment was bruised following the deadly quake in Japan's southwest, with Toyota and Honda Motor down more than four percent.

About an hour after the opening bell, Tokyo's benchmark Nikkei 225 index lost 2.97 percent, or 500.80 points, to 16,347.23, recovering slightly after shedding more than three percent at the start of trade.

The broader Topix index of all first-section shares fell 2.98 percent, or 40.60 points, to 1,320.80.

High-stakes talks in Doha on Sunday between major oil producing countries to forge a deal on capping production ended without agreement, Qatar's energy minister said, saying "more time" was needed for negotiations.

Rivalry between OPEC and regional heavyweights Saudi Arabia and Iran appeared to have prevented a deal despite the six-hour formal meeting between 18 producers.

"Expectations were too high that oil output would be frozen," Yoshinori Ogawa, a market strategist at Okasan Securities, told Bloomberg News.

"As we shed those expectations, it becomes easier for a risk-off mood to kick in."

In forex markets, the dollar fell to 108.07 yen from 108.75 yen Friday in New York, with investors moving in to the safe-haven Japanese currency.

Sentiment among investors also took a hit after a 7.0 magnitude quake struck in the small hours on Saturday on Japan's southwestern island of Kyushu.

More than 400 aftershocks have rocked Kumamoto and other parts of central Kyushu, an area unaccustomed to the powerful quakes that regularly rattle other parts of Japan.

Saturday's strong quake, the second in a little more than 24 hours, looked set to affect industry, with car giant Toyota on Sunday announcing the gradual suspension of assembly lines nationwide, citing problems with parts suppliers in the area.

Toyota lost nearly five percent as trading resumed on Monday following the news of the temporary suspensions, falling 4.96 percent to 5,455 yen.

Honda Motor, which said its motorcycle plant in Kumamoto will also remain shut until Friday, tumbled 4.59 percent to 2,895.5 yen.

Sony slumped 5.29 percent to 2,779.5 yen and factory robotics giant Fanuc was 3.64 percent off at 17,825 yen.

Kyushu Electric, which operates Japan's only two operating reactors, both on the island on which the quakes struck, dropped 7.10 percent to 1,098 yen.

Petroleum-linked stocks tracked the sharp drop in oil prices, with energy-explorer Inpex down 5.95 percent to 805.2 yen and JX Holdings off 3.71 percent to 438.3 yen.

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