(Updates with closing prices)

By Kevin Buckland

TOKYO, June 17 (Reuters) - Japan's Nikkei share average

dropped below the psychologically key 38,000 level for the first

time this month on Monday, as a risk-off mood prevailed amid

concerns about economic growth both at home and abroad.

Toyota Motor ( TM ) slid 2.6% amid continued fallout from

a certification scandal, with car-related shares among the worst

performing sectors.

The Nikkei ended the day down 1.8% at 38,102.44,

after earlier falling as much as 2.2% to 37,956.49 for the first

time since May 30.

Of the index's 225 components, 199 fell, while 25 rose and

one was flat.

The broader Topix skidded 1.7%.

Almost all of the Tokyo Stock Exchange's 33 industry groups

declined, led by a 3.5% slump for real estate. Only

pharma managed a slight gain.

"Basically, the Nikkei has been tracking pretty much

sideways for a long time, and now it's being shaken a little by

some worries about the economy," in Japan, the United States and

Europe, said Kazuo Kamitani, an equities strategist at Nomura

Securities, projecting a correction could run as far as 37,500.

The Nikkei has mostly fluctuated some 500 points either side

of 38,500 since late April, after hitting a record peak at

41,087.75 on March 22 and then dropping back as far as 36,733.06

a month later.

Automakers and suppliers shed 2.6% on Monday.

National broadcaster NHK reported that Toyota ( TM ) would extend a

production halt for affected models by at least an extra month

to the end of July.

Toyota ( TM ) Chairman and family scion Akio Toyoda faces a vote

against his re-election at an annual shareholder meeting on

Tuesday.

Suzuki Motor ( SZKMF ) dropped 3.6% and Mazda ( MZDAF ) lost

3.7%.

Chip-related shares also retreated, with Tokyo Electron ( TOELF )

off 2.5% and Advantest ( ADTTF ) tumbling 3.7%.

(Reporting by Kevin Buckland; Editing by Sonia Cheema and

Subhranshu Sahu)