"The market had already figured in the package's passage," said Yukio Takahashi at Shinko Securities Co. in Tokyo. "There are strong doubts about its implementation."

Latin American stocks also plunged also Monday, led by a stunning 15 percent intraday drop in Brazilian shares, on concern a major economic slowdown would devastate the region's commodities-based economies.

Argentina's Merval fell 5.9 percent to close at 1,423, while Mexico's IPC index slid 5.4 percent to 21,749. Chile's IPSA dipped 6 percent to 2,450, and Colombia's IGBC fell 4.9 percent to 8,761.

Canada's main stock exchange, meanwhile, dropped 572.92 points, or 5 percent, after earlier plunging 10 percent amid widespread economic fears.

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Associated Press writers Alex Kennedy in Singapore and Yuri Kageyama in Tokyo, Emily Vencat in London and Alan Clendenning in Sao Paulo, Brazil contributed to this story.