TOKYO: Japan's key Nikkei index dropped more than three percent on Wednesday, weighed down by falls on Wall Street following lacklustre manufacturing data.
The benchmark Nikkei 225 was down 3.06 percent, or 1,184.63 points, at 37,501.68 in early trade, while the broader Topix index was down 2.79 percent, or 76.21 points, at 2,657.06.
"The Japanese market is expected to start with sharp falls as US stocks declined and the yen firmed" against the dollar, said senior market analyst Toshiyuki Kanayama of brokerage Monex.
The dollar fetched 145.31 yen in early Asian trade, down modestly from 145.87 yen in New York.
Overnight, major US indices spent the entire day in the red, with the Nasdaq finishing down more than three percent.
The tech-focused Nasdaq closed down 3.3 percent, the blue-chip Dow Jones Industrial Average fell 1.5 percent, while the broad-based S&P 500 shed 2.1 percent.
Among major shares in Tokyo, SoftBank Group was down 5.66 percent at 7,956 yen, while chip-making equipment manufacturer Tokyo Electron plunged 5.99 percent to 23,640 yen.