Tokyo stocks lost ground on Monday, with the key Nikkei stock index falling 0.94 percent as worse-than- expected U.S. jobs data dragged down Wall Street at the end of last week reinforcing concerns about the health of the U.S. economy.

The U.S. unemployment rate in May inched up to 9.1 percent from 9 percent, the Labor Department said Friday.

Specifically, economists noted that just 54,000 jobs were created in May, marking the lowest reading in eight months, with private companies employing just 83,000 new workers in May -- the lowest in almost one year and the government slashing some 30,000 jobs.

Analysts said that the latest employment figures released by the U.S. Labor Department on Friday, coupled with ongoing concerns about falling house prices and rising fuel prices in the world's largest economy, fueled concerns in Japan that the economic recovery in the United States is slowing and will impact global equity costs.

Some brokers said that one of the root causes of the current economic slump in the United States could potentially be disruptions to Japan's supply chains, following the March 11 disasters.

"Investors want to further assess whether the weak U.S. data was a result of lingering impact from disruptions to Japan's supply chain or a reflection of the slowdown in the overall U.S. economy," said Yumi Nishimura, a senior market analyst at Daiwa Securities.

Compounding a sour market mood on the first trading day of the week was Tokyo Electric Power Co. hitting a limit-down low of 206 yen and finally closing at 207 yen.

Market players said that investors dumped Tepco shares following reports the firm will face losses of 570 billion yen (7. 09 billion U.S. dollars) in this fiscal year, before massive compensation costs are factored into the beleaguered utility firm' s outlook.

Atsushi Saito, President of the Tokyo Stock Exchange, told the Asahi Shimbun that Tepco, owner and operator of the No. 1 nuclear power station in Fukushima Prefecture, currently central to the worst nuclear accident since the Chernobyl disaster in 1986, should undergo a court-sanctioned governmental rehabilitation program, similar to that of Japan Airlines (JAL) whose shares were delisted last year.

"There's so much uncertainty surrounding what will happen with the utility that it's impossible to analyze," Naoteru Teraoka, general manager at Tokyo-based Chuo Mitsui Asset Management Co. " The stock moves whenever anybody opens their mouth."

The 225-issue Nikkei Stock Average fell 89.15 points from Friday to 9,403.06, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange dropped 6.58 points, or 0.81 percent, to finish at 809.99.

With Prime Minister Naoto Kan under increasing pressure to resign as he tries to cajole the main opposition Liberal Democratic Party (LDP) to form a coalition with the ruling Democratic Party of Japan (DPJ) as they stand ready to block a key bill for reconstruction costs, market players said that Tepco could be facing liquidation and current plans for the government to help the utility meet its massive compensation responsibilities may not be upheld.

Other utility companies and financial institutions who may be asked to waive substantial amounts of Tepco debt also retreated on Tepco's ever-worsening predicament.

Kansai Electric Power plummeted 8.0 percent to 1,215 yen, with Mitsubishi UFJ Morgan Stanley Securities Co. slashing its target price on the stock to 1,350 yen from 2,150 yen and Chubu Electric Power plunged 7.4 percent to 1,148 yen.

Japanese megabanks fell on concerns they will have to forgo debt repayments by Tepco, with top-lender Mitsubishi UFJ Financial Group Inc. slumping 3 percent to 359 yen and Sumitomo Mitsui Financial Group Inc. falling 1.9 percent to 2,269 yen. Mizuho Financial Group Inc. meanwhile slipped 0.8 percent to close at 121 yen.

Trading volume on Monday rose to 1.9 billion shares on the Tokyo Exchange's First Section, rising from Friday's volume of 1.6 billion, with declining issues outnumbering advancing ones by 1, 001 to 486.

VietNamNet/Xinhuanet