Japan's benchmark Nikkei 225 Stock Average sank to a three-month intraday low Tuesday over increasing credit concerns as investors worried more US banks would collapse and Japanese lenders holding US mortgage debt could be hit, the dpa reported.
The Nikkei fell 193.2 points, or 1.48 per cent, to 12,816.96.
The broader Topix index of all first-section issues was also down 20.46 points, or 1.6 per cent, at 1,260.26.
The losses came ahead of the end of a two-day meeting of Japan's central bank, which was expected to maintain its key interest rate because of fears of inflation.
On currency markets at 9 am (0000 GMT), the dollar was quoted at 106.20-25 yen, down from Monday's 5 pm quote of 106.58-61 yen.
The euro was quoted at 1.5888-93 dollars, up from Monday's 5 pm quote of 1.5877-80 dollars, and at 168.77-82 yen, down from 169.25-29 yen.