Nikkei index closed at a two-month low

Japan’s Nikkei index closed at its lowest level in two months on Monday, as fears of a recession and a possible crisis in the global banking sector led to the sale of risky assets despite a deal reached over the weekend to save the Swiss Bank Credit Suisse.

The Nikkei closed down 1.42% at 26945.67, the lowest close since January 23, and the broader Topix index lost 1.54% to 1929.30.

In light of the crisis that began with the collapse of Silicon Valley Bank in the US on Friday, investors lost confidence in US regional banks and Credit Suisse in Europe.

UBS Group said over the weekend that it would buy Credit Suisse for 3 billion francs ($3.2 billion) and incur losses of up to $5.4 billion, in a merger deal designed by Swiss authorities.

Japan’s banking sector lost 1.88 percent, after jumping more than 1 percent earlier in the session.

The index has lost 13.6 percent so far this month, the worst performer, along with the insurance sector, which also recorded a similar decline.

Mitsubishi UFJ Financial Group lost 1.84 percent, Sumitomo Mitsui Financial Group lost 1.67 percent, and Mizuho Financial Group lost 2.3 percent.

Oil refineries pared its previous gains to close down 0.17 percent.