Japan's benchmark stock index plunges over 6 percent in early trade, the Associated Press reported.
The Nikkei 225 stock average tumbled lower in early trade Friday, following its losses the previous day.
Japan shares sank following further falls on Wall Street overnight.
Investors have continued to sell on pessimism about the global economy and insecurity about what moves U.S. president-elect Barack Obama will take early in his administration.
Exporters were lower as the yen strengthened against the dollar.