The Nikkei average fell 1.7 per cent today as exporters were hit by a stronger yen while bank shares dropped on worries over the global credit squeeze.
The Nikkei lost 291.72 points to close at 16,814.37, the lowest close since September 28th. The broader Topix index declined 1.6 per cent to 1,591.28.
Investors also shift funds from stocks to bonds, helping Japanese government bond futures rise to a one-month high. Higher oil prices also put a lid on the market.
Trade was slow with 1.7 billion shares changing hands. Decliners outpaced advancers by a ratio of nearly six to one.
The strong yen dragged down technology exporters including electronics parts maker TDK, down 2.4 per cent at 9,660 yen, and digital camera maker Canon, which fell 2.8 per cent to 5,930 yen.