Japanese stocks close the first trading session of the new year with significant losses.

The main Japanese stock indices closed on significant losses on Monday, as the Tokyo Stock Exchange resumed trading in its first session of the new year.

The Nikkei average dropped by more than 1% on the first trading day of 2025 on Monday as investors sold shares after the index's rise at the end of the year, overshadowing gains in chip-related stocks.

In terms of trading, the main Japanese stock index, Nikkei 225, fell by 1.47% to close at 39,307.05 points, after erasing the marginal gains it had achieved at the start of the session. At the same time, the broader Topix index dropped by 1.02% to end the session at 2,756.38 points.

This follows the Nikkei posting a gain of 4.4% during December, marking its largest monthly gain since February of last year, while the Topix rose by 3.9% in December.

In individual stock trading, shares of Japanese retail company Fast Retailing topped the losses on the Nikkei index, falling by 4.22%, while shares of staffing company Recruit Holdings decreased by 3.32%.

On the other hand, Japanese steel giant Nippon Steel saw its five-session winning streak come to an end, dropping by 0.75% today, after U.S. President Joe Biden blocked its proposed $14.9 billion acquisition of American counterpart U.S. Steel.