By Agence France-Presse
The benchmark Nikkei 225 index was down 3.19 percent or 706.12 points to 21,386.06 shortly after the open, while the broader Topix index was down 2.62 percent or 43.32 points, to 1,608.75.
"The market environment is tough," Makoto Sengoku, market analyst at Tokai Tokyo Research Institute said, pointing to the sharp drops in US stocks.
"Sentiment has worsened due to a mixture of various negative pieces of news," he said.
Investors are facing the expectation of higher US interest rates, which would boost borrowing costs, anxiety over the fallout from the murder of Saudi journalist Jamal Khashoggi, and an ongoing budget dispute between Italy and Brussels.
A US data report Wednesday showed home sales fell to their slowest pace in nearly two years, while forecasts from big companies AT&T, UPS and Texas Instruments disappointed.
"This mess of bad factors has made it difficult for markets to seize a chance to turn up," Sengoku told AFP.
Risk aversion spawned safe-haven buying of the yen, in a negative development for Japanese exporters.
The dollar was changing hands at 111.89 yen against 112.19 yen in New York Wednesday afternoon.
In individual stocks trade, Toyota lost 2.02 percent to 6,445 yen and IT investor SoftBank Group tumbled 2.80 percent to 8,947 yen.