The Tokyo Stock Exchange's key index followed up its worst single-day drop in more than two years with a slightly larger plunge today, while the dollar edged up against the Japanese yen. The 225-issue Nikkei Stock Average fell 666.41 points, or 1.8 percent, closing at 36,850.36, its lowest level since the 36,881.53 closing Nov. 27. The market was closed Monday for a national holiday. On Friday, the Nikkei lost 656.36 points, then its worst one-day plunge since 731.91 on Nov. 19, 1987, following a crash on Wall Street. So far this year, the Nikkei has lost nearly 2,000 points, or 6.8 percent. ``The market was marred with sell orders all day long,'' said Ichitaro Watanabe, a dealer at Nikko Scurities Co. ``It was the result of a combination of unfavorable factors hitting the market all at once.'' With investors dumping issues, the index began its dive as soon as the market opened today, and quickly fell below the 37,000-point level, dealers said. ``Nobody was buying,'' said Yoshio Shimoyama of Nikko Securities. ``Everybody was watching and waiting.'' Dealers and analysts have said the Nikkei's recent fall has resulted largely from falling government bond prices caused by the weakening yen. The yen's weakness also has intensified existing pessimism in the stock market, they said. ``But over the weekend, the regional conflict worsened in the Soviet Union and the New York market fared poorly overnight, aggravating the market's pessimism,'' said Keiichi Nishida, a dealer at Kidder Peabody. Dealers said the fall in bond prices is likely to stop soon because yields are approaching an appropriate level, around 7 percent, but a recovery in stock prices is unlikely before Japan's general elections in February. ``Right now, market players see no encouraging sign to buy issues,'' said Yoshiro Inoue, an analyst at Nomura Securities. In currency dealings, the dollar closed at 145.75 yen, up 0.40 yen from Friday's close of 145.35 yen. It opened at 145.85 yen and ranged between 145.65 yen and 146.07 yen. Traders attributed the U.S. currency's strength in Tokyo to its rise against most major foreign currencies Monday, while the New York and Tokyo markets were closed for holidays. The central bank's dollar-selling intervention kept the dollar from rising more steeply, said a trader with the Bank of Tokyo, speaking on condition of anonymity. Kyodo News Service said the bank sold more than $400 million. The bank does not comment on its exchange market activities. The Bank of Tokyo trader said the lower stock and bond prices prompted market players to sell yen. Chizuko Satsukawa, a trader with Chemical Bank in Tokyo, said the yen will remain weak for the time being. ``Concerns over the election are prompting market players to get rid of the yen, which helps the dollar become stronger,'' she said. But a sharp plunge by the yen is also unlikely while the Bank of Japan is actively selling dollars, Ms. Satsukawa said.