TOKYO: Tokyo stocks opened sharply lower on Thursday with investors disheartened by a bruising session on Wall Street.

The benchmark Nikkei 225 index was down 2.28 percent or 654.16 points at 27,981.05 in early trade, while the broader Topix index lost 2.11 percent or 39.17 points to 1,820.90.

The Japanese market is "dominated by profit-taking as investors disliked the rout in US stocks," said Yoshihiro Ito, senior strategist at Okasan Online Securities.

The dollar fetched 104.28 yen in early Asian trade, higher than 104.13 yen in New York and 103.65 yen late Wednesday, after the US Federal Reserve maintained ultra-loose interest rates, with its Chair Jerome Powell cautioning the US economic outlook was "highly uncertain" in light of surging Covid-19 cases.

In Tokyo, exporters were generally lower with Toyota declining 2.03 percent to 7,375 yen, Sony trading down 2.91 percent at 9,971 yen, and chip-making equipment manufacturer Tokyo Electron dropping 3.49 percent to 42,370 yen.

Bio-tech firm JCR Pharmaceuticals rallied 5.9 percent to 2,904 yen after a report said it will produce undiluted Covid-19 vaccine developed by the British drug group AstraZeneca and Oxford University.

On Wall Street, the Dow finished down 2.1 percent, at 30,303.17.