By Sam Byford

Sept 26 (Reuters) - Japanese stocks kicked off the final week of the quarter on a negative note, as investors resumed trading after an extended weekend to markets that were dented by Japanese authorities' currency intervention and the collapse of the British pound.

The Nikkei was down 1.97% at the break on Monday after slipping as far as 26,515.06, its lowest level since July 14. The index is on course to drop for a third straight day.

The broader Topix fell 1.98%.

Stock markets tracked broader Asian peers lower as the U.S. dollar soared and bond yields strengthened amid increasing fears of a global recession. S&P 500 e-mini futures fell 0.4%.

The yen was last at 143.8 to the dollar, having weakened 2.43% since the Ministry of Finance's intervention drove it to 140.31 last week, while the benchmark 10-year Treasury yield was at 3.7185%.

Japanese authorities intervened in the foreign exchange market for the first time since 1998 to shore up the battered currency.

Sterling fell to an all-time low of $1.0327, extending losses from Friday after Britain's new chancellor Kwasi Kwarteng announced a sweeping package of tax cuts.

"There were strong expectations that the yield would settle at 3.5%, but it continued to rise and there's been selling focused on blue-chip stocks," said a domestic asset manager.

Shares of SoftBank Group Corp weighed on the Nikkei the most with a 4.14% drop, followed by Tokyo Electron Ltd and Fast Retailing Co Ltd.

Automaker stocks also traded in red, with Mazda Motor Corp marking the biggest loss at 5.3% following a report that the company would stop car production in Russia.

Of the Nikkei's 225 constituents, 205 made losses, 15 advanced, and five traded flat. Every sector dropped overall.

Despite the broad losses, air and land transportation stocks traded steady as Japan prepares to re-open its borders to regular tourism next month.

"The resilience stands out, and shows increasing expectations for inbound demand due to the easing of COVID-related border restrictions," said a domestic securities broker.

Konami Group Corp was the best performer in the Nikkei, gaining 0.89%. (Reporting by Sam Byford and Tokyo markets team; Editing by Sherry Jacob-Phillips)