Tokyo shares fell sharply in early trading on Tuesday, following the trends set in Europe and the US.
The Nikkei 225 was down 4.6% at 16,226.3 by midday.
Earlier, US and European shares were pulled down by big falls among banking and technology stocks. Deutsche Bank led the fallers, dropping 9.5%.
The Dow Jones dropped 1.1%, the FTSE 100 in London fell 2.7% and the Athens stock exchange dropped to a 25-year low.
The banks were the biggest fallers in Tokyo, with Mitsubishi UFJ dropping 7.2%, Sumitomo Mitsui down 6.6% and Mizuho Financial Group losing 5.3%.
The strengthening yen also hit big exporters, with the currency up 0.8% against the dollar.
Toyota dropped 4.5%, Honda lost 5.3% and Nissan fell 5.1%.
‘Struggling what to buy’
The Nikkei 225 is down more than 20% from its peak levels, reached last June.
“When the strong yen is a concern, you would buy domestic-demand sensitive stocks like banks, but we can’t buy them now so we are really struggling what to buy on a day like this,” said Masashi Oda, senior investment officer at Sumitomo Mitsui Trust Bank.
Meanwhile, in Australia the ASX index was down 105.1 points, or 2.1%, at 4,917.0.
There was little trading elsewhere in Asia, with China’s mainland markets shut all week for Lunar New Year celebrations. Hong Kong and South Korea are both closed for three days.
Oil prices have been continuing their falls, with Brent crude down another 2.7% at $33.13 a barrel.