Japan’s Nikkei 225 fell 2.03% in early trade Monday. Trading volume is expected to be low as many Asian markets remain shut for the Lunar New Year holidays.
The Topix index was down 1.79%.
The Japanese yen, which is considered a safe-haven currency, changed hands at 108.79 per dollar, strengthening from levels near 110.00 in the previous week.
U.S. futures also pointed to declines on Wall Street, with the Dow Jones Industrial Average implied to drop more than 300 points at Monday’s open.
The dollar index, which measures the U.S. dollar against a basket of its peers, traded at 97.826, climbing from an earlier low around 97.783.
Investors appear to be wary about the fast-spreading coronavirus, which started in the Chinese city of Wuhan.
“Uncertainty continues to weigh on markets with increasing concerns about the deadly and contagious coronavirus, which continues to spread,” Liz Kendall, senior economist at ANZ Research, wrote in a morning note.
More than 2,000 people, mostly in China, have been affected by the new respiratory illness and 56 are reported to have died from the disease.
The scale of the virus outbreak is already affecting the Chinese economy, according to preliminary data.
Markets in Australia, China, Hong Kong, Singapore, South Korea, and Taiwan are closed for public holidays.