TOKYO (Kyodo) -- The Nikkei stock index plunged nearly 5 percent on Monday, marking its third-biggest point loss of the year, as exporters were sold off due to the stronger yen following Shigeru Ishiba's victory in the ruling Liberal Democratic Party's leadership race late last week.

Ishiba, who is set to become Japan's next prime minister, has expressed support for the Bank of Japan's efforts to normalize monetary policy and may consider raising the capital gains tax. He defeated Sanae Takaichi, a proponent of monetary easing, in a runoff election.

The 225-issue Nikkei Stock Average ended down 1,910.01 points, or 4.80 percent, from Friday at 37,919.55. The broader Topix index finished 95.00 points, or 3.47 percent, lower at 2,645.94.

On the top-tier Prime Market, decliners were led by transportation equipment, real estate and securities house issues.

Against the Japanese currency, viewed as a safe-haven asset, the U.S. dollar briefly slid to the upper 141.

The dollar had already plunged by around 3 yen on Friday after Ishiba's victory, as he is expected to support the BOJ raising interest rates further, dealers said, reversing the yen-selling trend that had been driven by speculation of a Takaichi win in the LDP presidential race.

At 5 p.m., the dollar fetched 142.37-39 yen, compared with 142.15-25 yen in New York and 143.18-21 yen in Tokyo at 5 p.m. Friday.

The euro was quoted at $1.1176-1177 and 159.12-16 yen against $1.1160-1170 and 158.72-82 yen in New York and $1.1132-1133 and 159.40-44 yen in Tokyo late Friday afternoon.

The yield on the benchmark 10-year Japanese government bond ended at 0.850 percent, up 0.045 percentage point from Friday's close. The debt was sold, sending yields higher, on views Ishiba is unlikely to oppose gradual BOJ rate hikes.

On the equities market, almost every sector declined in the wake of the stronger yen after Ishiba's selection as the new LDP head. A firmer currency reduces the prospects of higher profits for exporters when repatriating earnings from overseas.

Analysts said that selling was spurred by the stock market overheating last week, as the Nikkei climbed nearly 2,000 points on Thursday and Friday due partly to rising prospects of a win by Takaichi, who has taken a negative stance about the BOJ's rate hikes that would keep the yen weak.

"The fall today erased recent gains on bets for Takaichi, in a sign investors sold after going too far in their expectations," said Makoto Sengoku, senior equity market analyst at the Tokai Tokyo Intelligence Laboratory Co.

The market was also weighed down by uncertainty over Ishiba's economic policies due to a lack of clarity over his plans for the economy, Sengoku said. "But looked at another way, this makes it more likely he maintains the policies of outgoing Prime Minister Fumio Kishida," he added.

Banks were the only sector to rise in Tokyo, as prospects of future rate hikes raised expectations of higher borrowing costs and improved profits.