LONDON (AP) — European stock markets fell heavily today after the Nikkei index in Japan closed at its lowest in 26 years as the financial crisis raised recession fears and drove up the yen, piling the pressure on the country’s exporters.

Tokyo’s Nikkei 225 index closed down 6.4 percent to 7,162.90 — the lowest since October 1982 — with exporters like Toyota Motor Corp. and Sony Corp hit hard. The losses came despite a report that the government was considering massive capital injection into struggling banks in a bid to calm jittery financial markets.

“Worries about the impact of the surging yen on Japanese export earnings have hit the Nikkei hard,” said Julian Jessop, chief international economist at Capital Economics.

“This in turn has led to sharp falls in European markets even when, as on Friday, the U.S. had closed higher the day before,” he added.

Benchmarks in Britain, Germany and France trading down more than 4 percent. The FTSE 100 index was 190.97 points, or 4.9 percent, lower at 3,693.39, with heavyweight oil stocks BP PLC and Royal Dutch Shell down 5.1 percent and 4.7 percent respectively as oil prices continue to plummet despite last week’s decision by the OPEC oil cartel to cut production.