The Nikkei 225 index was down 1.93 percent or 398.51 points at 20,256.62 in early trade, while the broader Topix index dropped 2.01 percent or 30.14 points to 1,469.36.

"The Japanese stock market is sliding against the backdrop of sharp falls in US shares," Okasan Online Securities said in a note.

"Worries over the US economic recession grew, while negative economic data for China and Germany also prompted investors to downgrade their views on the global economy," Mizuho Securities added.

The dollar fetched 105.91 yen in early Asian trade, against 105.78 yen in New York.

Tokyo shares were down across the board, with Toyota down 1.85 percent at 6,726 yen, Nissan down 2.18 percent at 648 yen, and Sony off 2.51 percent at 5,766 yen.

On Wall Street, the Dow ended down 3.1 percent at 25,479.42.