The collapse of two US banks sent a shockwave through financial markets in Japan on Monday.
Tokyo's Nikkei Stock Average ended the day at 27,832. That's down 311 points, or 1.1 percent, from Friday's close. The index briefly lost more than 500 points.
Investors unloaded shares almost across the board. Bank and IT-related stocks were especially hard-hit.
Investors moved money into less-risky assets. They bought Japanese government bonds, sending the yield of the benchmark 10-year issue down to 0.295 percent.
It's a level not seen since December 20. That was when the Bank of Japan tweaked its monetary policy to allow the 10-year yield to move in a wider band.
The exchange rate between the yen and the dollar fluctuated widely. The Japanese currency gained more than 2 yen at one stage.
Japan's government and central bank expect the overall impact to be limited.
This reflects the fact that the bank at the center of the situation, Silicon Valley Bank, is a special type of lender that mainly deals with startups, said Ichikawa Masahiro, chief market strategist at Sumitomo Mitsui DS Asset Management.
Ichikawa said it's unlikely this will spread to other banks and disrupt the global financial system, the way collapse of Lehman Brothers did in 2008.
He said what's needed is to calmly watch events over the next few days.