TOKYO, Aug 16 (Reuters) - Japanese shares fell on Monday as concerns of slow economic growth due to the highly contagious Delta variant of COVID-19 weighed on investor sentiment, while market heavyweights Toyota Motor and Sony Group dropped due to a stronger yen. The Nikkei share average closed 1.62% lower at 27,523.19, marking its biggest drop since July 30. The broader Topix slid 1.61% to 1,924.98 in its sharpest drop since June 21. “Japan is still lagging behind the United States and Europe in taking measures against COVID-19, including vaccinations. That could lead to a downturn in the economy,” said Norihiro Fujito, chief investment strategist, Mitsubishi UFJ Morgan Stanley Securities. “And the worse-than-expected outcome of the University of Michigan’s consumer survey indicated an impact of the Delta variant in the U.S. and that weakened the dollar.” The survey released last week showed consumer sentiment slid to the lowest level since 2011 amid an acceleration in COVID-19 infections caused by the Delta variant. Tokyo is already under a state of emergency, the fourth so far in the pandemic, though some experts have said it should be expanded to cover the whole country as the number of new infections remains at a record level. Meanwhile, data showed Japan’s economy rebounded more than expected in the second quarter, but many analysts expect growth to remain modest in the current quarter as state of emergency curbs were reimposed to curb a spike in infections. Export-focused Toyota Motor fell 1.53%, while Honda Motor slipped 1.57%. Sony Group lost 2.24%. Fujifilm Holdings jumped 6.78% after the medical equipment maker raised its annual operating profit outlook by 20.9%. Citizen Watch surged 9.82% after the watch maker returned to profit in the quarter ended June. The volume of shares traded on the Tokyo Stock Exchange’s main board was 1.04 billion, compared to the average of 1.02 billion in the past 30 days. (Reporting by Junko Fujita; editing by Uttaresh.V and Subhranshu Sahu) Our Standards: The Thomson Reuters Trust Principles.