TOKYO: Tokyo's key Nikkei index opened down two percent on Wednesday, extending global market jitters, as traders worried about rising oil prices and fears of a US debt default.
The benchmark Nikkei 225 index was down 2.00 percent, or 602.55 points, at 29,581.41 in early trade, while the broader Topix index fell 2.11 percent, or 43.83 points, to 2,037.94.
"Japanese trade is seen dominated by sell orders as sentiment worsened after sharp falls in US shares," senior strategist Yoshihiro Ito of Okasan Online Securities said in a note.
The dollar fetched 111.59 yen in early Asian trade against 111.34 yen in New York late on Tuesday.
On Wall Street, weak data, rising bond yields and fears of a debt default caused indices to sink sharply, with the benchmark Dow closing 1.6 percent lower at 34,299.99, the broad-based S&P falling two percent and the tech-rich Nasdaq losing 2.8 percent.
Tokyo investors will shift their focus to the result of the ruling Liberal Democratic Party's leadership election later in the day, which will anoint the next prime minister, analysts said.
The race follows Prime Minister Yoshihide Suga's shock announcement that he would not run for head of the ruling Liberal Democratic Party (LDP).
Whoever the party picks in the Wednesday vote will almost certainly be elected as the next prime minister on October 4 at an extraordinary parliament session, and will contest a general election that has to be held by late November.
Japan Post was down 3.20 percent at 970.9 yen after a report the Japanese government may start the process to sell about 950 billion yen ($8.5 billion) in shares in the postal and financial services giant as early as this week.
Among other major shares, Fuji Film Holdings was down 1.98 percent at 9,572 yen, Panasonic was off 2.95 percent at 1,400.5 yen, and Canon was down 1.27 percent at 2,764.5 yen.
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