(Updates with closing prices)

TOKYO, Feb 3 (Reuters) - Japan's Nikkei fell more than

2% on Monday in its worst session in four months as concerns

over the global economy mounted after U.S. President Donald

Trump levied tariffs on Canada, Mexico and China, with

automakers leading the decline.

The Nikkei slipped 2.66% to 38,520.09, its lowest

close since Jan. 17. The index also posted its biggest daily

percentage drop since Sept. 30. The broader Topix fell

2.45% to 2,720.39.

Trump imposed 25% tariffs on Canadian and Mexican imports

and 10% on goods from China starting Feb. 4. Canada and Mexico

immediately vowed retaliatory measures, and China said it would

challenge Trump's levies at the World Trade Organization.

"Japanese stocks fell amid uncertainties about the global

economic outlook, which includes worries that Japanese exports

may be a target of Trump's tariff policy in the future," said

Kentaro Hayashi, senior strategist at Daiwa Securities.

"Also, if prices rise in the U.S. and the dollar

strengthens, yields will rise. That may affect Japan's monetary

policy."

Automakers slumped, with Toyota Motor ( TM ) losing 5% to

drag the Topix the most. Honda Motor ( HMC ) fell 7.2% and

Nissan Motor ( NSANF ) lost 5.63%, with strategists saying their

auto production in Mexico is bigger than their Japanese peers.

In contrast, Suzuki Motor ( SZKMF ), which is not present in

the United States, posted a marginal loss of 0.05%.

"If automakers face higher tariffs, they would have to raise

prices and their competitiveness might be hurt," said Fumio

Matsumoto, chief strategist at Okasan Securities.

Mexican operations of Japanese automakers are largely

dependent on U.S. demand and that is a big factor for them, said

Tomo Kinoshita, global market strategist at Invesco Asset

Management in Japan.

One but all of the Tokyo Stock Exchange's 33 industry

sub-indexes fell, with automaker shedding 5% to

become the worst performer.

The Nikkei volatility index rose 20% to its highest

level since mid-December.

Shares of video game developer Konami Group ( KNAMF ) jumped

14% to become the biggest support for the Nikkei.