The benchmark Nikkei 225 index was down 1.76 percent or 383.80 points at 21,394.81 in early trade, while the broader Topix index was down 1.74 percent or 27.73 points at 1,568.56.
"The Japanese market is falling sharply, pressured by sell-offs in US shares and a higher yen," Toshiyuki Kanayama, senior market analyst at Monex, said in a commentary.
Wall Street stocks tumbled Wednesday after payrolls firm ADP estimated the US added 135,000 private-sector jobs in September -- the figure below market expectations bolstering anxiety over the US economy.
The dollar fetched 107.07 yen in early Asian trade, against 107.16 yen in New York late Wednesday.
Indices were lower elsewhere in the region too, with Australia's ASX down 2.4 percent shortly after the open.
In Tokyo, shares were lower across the board, with Toyota dropping 2.13 percent to 7,006 yen, Honda dipping 2.44 percent to 2,749 yen, Panasonic trading down 2.36 percent at 880.4 yen and Hitachi off 1.89 percent at 3,996 yen.
Kansai Electric was down 0.82 percent at 1,255.5 yen after the company admitted two executives who were responsible for its nuclear business both received more than 100 million yen ($929,000) in gifts from a former official of a town hosting one of its nuclear plants.
The utility disclosed additional information on the scandal involving more than a dozen officials on Wednesday, but its chief executive officer refused to step down.
Tokyo Electric was down 1.86 percent at 577 yen.
In New York, the Dow ended down 1.9 percent at 26,078.62.