The yen fell to a 24-year low against the US dollar on Monday. Investors sold the Japanese currency and bought the greenback to lock in higher US yields on a widening interest-rate gap between the two countries.

The yen briefly weakened to the 135-yen mark in Tokyo trading on Monday, its lowest level since October 1998.

The US Federal Reserve appears more committed to tighten policy to curb inflation. The Bank of Japan, by contrast, is sticking to its easy-money stance.

The US Consumer Price Index for May rose 8.6 percent from a year earlier, its highest level in more than 40 years. Investors say that level of inflation will likely prompt the Fed to accelerate its pace of rate hikes.

On the Tokyo Stock Exchange, the benchmark index fell sharply on Monday for a second straight trading day. The Nikkei Average ended at 26,987, down 836 points, or 3 percent, from Friday's close.

Investors unloaded shares in a wide range of sectors, including export-related stocks, despite the weaker yen.

The market players are concerned that inflation may persist in the US.