Asia markets took "sell in May" sentiment to heart on Monday, with the Japanese benchmark index tumbling as much as 4 percent and Australian shares taking a hit from a bank sell-off.

The Nikkei 225 was down 3.72 percent, after initially tumbling 4.14 percent in early trade. The Japanese market was closed on Friday for a public holiday, but on Thursday, the benchmark index shed 3.61 percent after the Bank of Japan surprised markets by standing pat on its monetary policy.

In South Korea, the Kospi was lower by 0.43 percent. Down Under, the ASX 200 dropped 1.19 percent, with a steep decline of 2.27 percent in the heavily-weighted financials sub-index.

Major Japanese exporters sold off sharply, with shares of Toyota down 4.26 percent, Nissan down 5.02 percent and Honda off 5.21 percent in the wake of a stronger yen, which is usually negative for exporters as it makes their products less competitive overseas and decreases their overseas profits when translated back into the Japanese currency.

The Japanese yen traded at 106.43 against the dollar on Monday as of 9:00 a.m. HK/SIN, up 0.08 percent from an earlier low of 106.14. But that still marks a significantly stronger Japanese currency, as the pair traded at the lower range of the 107 level on Friday afternoon Asia time and at levels above 111 last week.

Sony shares tumbled 4.21 percent after the company reported a loss of 88.3 billion yen for the fiscal fourth quarter on Thursday after the market close.

Takata shares shed 10.22 percent after Reuters reported more than 100 million vehicles globally are likely to be subject to recalls over the company's problematic air-bag inflators.

Panasonic dropped 7.19 percent after Reuters reported the company said its profit is likely to fall this fiscal year.

Down under, Australia's major banks dropped, with shares of Westpac down 4.48 percent. The bank announced results for the six months ended March 31, 2016 on Monday morning, with cash earnings up 3 percent to 3.9 billion Australian dollar (USD 2.96 billion) on-year, missing the forecast for AUSD 4.07 billion from six analysts polled by Reuters.

In a statement to the Australian Securities Exchange, Westpac said cash earnings growth was lower due to higher impairment charges.

The country's other major banks also sold off, with shares of ANZ down 3.40 percent, Commonwealth Bank of Australia down 3.34 percent and National Australia Bank dropping 3.42 percent.

The Australian dollar was up 0.11 percent at USD 0.7610, after falling from levels above USD 0.77 last week on the back of weaker-than-expected inflation data. The Aussie will be in focus this week as the Reserve Bank of Australia meets on Tuesday, with some analysts expecting further easing of its monetary policy.

Bucking the trend, shares of Virgin Australia traded up 0.71 percent after the company, one of the country's major airlines, said it will cut capacity by 5.1 percent in the fiscal fourth quarter, citing uncertainties around the upcoming Federal election, weak consumer demand and the downturn in the resources sector.

In the currency market, the dollar index, which measures the dollar against a basket of currencies, was down 0.19 percent at 92.906, compared with touching levels near 95 in the previous week.

On Friday, major US indexes closed lower, with the Dow Jones industrial average finishing down 0.32 percent, the S&P 500 off by 0.51 percent and the Nasdaq composite down 0.62 percent.

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First Published:May 2, 2016 7:42 AM IST