Tokyo shares fell to a 28-month low as technology stocks were battered by the US Nasdaq tumble overnight. Investor sentiment was further undermined by unexpectedly weak industrial production figures announced today.
The benchmark Nikkei 225 fell 176.32 or 1.35 per cent to close at 12,883.54 after having fallen as low as 12,784.17 earlier in the day - its lowest level in 15 years.
Blue chip tech shares slid on the back of continued Nasdaq weakness.
Furukawa Electric, a fibre-optics cable-maker, plummeted 10.3 per cent to 1,550 yen after JDS Uniphase, the world's largest supplier of fibre-optics components, tumbled over 15 per cent overnight.
Computer-and chip-makers were also hit by weakness in their US counterparts. NEC fell 3.2 per cent to 1,909 yen, Toshiba was down 2.7 per cent to 655 yen and Fujitsu tumbled 3.4 per cent to 1,607 yen.
Nikon, the camera and semiconductor equipment-maker, tumbled 7 per cent to 1,391 yen.
The rest of the market was sluggish as investor enthusiasm was weighed down by the unexpected announcement of a 3.9 per cent fall in industrial production.
But the banking sector remained firm while investors placed hopes on the Bank of Japan's regular policy board meeting and a chance of further monetary easing.
Mizuho Holdings gained 1.4 per cent to 720,000 yen, Sakura Bank firmed 0.6 per cent to 695 yen, and Tokyo Mitsubishi Bank rose 2.1 per cent to 1,161 yen.
Financial Times Service