TOKYO - Tokyo's key Nikkei index tumbled more than three percent in morning trade on Thursday, after the tech-heavy Nasdaq index plunged on Wall Street.
The benchmark Nikkei 225 shed 3.02 percent, or 1,182.10 points, to 37,972.75 about 90 minutes after the opening bell.
The broader Topix index shed 2.70 percent, or 75.41 points, to 2,717.71.
A higher yen weighed on the market, with analyst Stephen Innes saying the safe-haven Japanese currency is "basking in the glow of this week's risk-off mood".
The yen surged to 152.65 per dollar -- a level not seen since early May.
"Momentum traders seem to have shifted from squaring short yen positions to taking long yen bets ahead of next week's Bank of Japan meeting," Innes said in a newsletter.
Market watchers are divided on whether Japan's central bank will raise interest rates again on July 31 as they look to normalise their longstanding ultra-loose monetary policy.
Hideyuki Suzuki, senior analyst at SBI Securities, told AFP that "falls in the US tech sector -- especially a plunge in Tesla shares and disappointing Alphabet earnings -- as well as a stronger yen weighed on the market".
On Wall Street, the tech-rich Nasdaq dived 3.6 percent, the blue-chip Dow fell 1.3 percent, and the broad-based S&P 500 dropped 2.3 percent.