The Nikkei tumbled 3% on Friday to touch its lowest level for almost three weeks as the yen strengthened against the dollar.
Global equities climbed overnight as poor growth figures from the US allayed fears the Federal Reserve will soon slam the brakes on its stimulus programme.
Sharp share price falls from a number of financials have sent the FTSE 100 lower today, with the index approaching a four-month low.
The Nikkei endured further sharp losses on Thursday, entering a bear market as investors sold Japanese shares ahead of an expected tapering of QE by the US Federal Reserve.
Japanese equities gave up nearly 200 points overnight as the Bank of Japan (BoJ) disappointed the market by opting to keep its monetary policy unchanged, failing to address concerns over bond market volatility.
Markets surged overnight on news Japan revised its annualised growth rate to 4.1% - up from an estimated 3.5%.
Asian markets fell again overnight over uncertainty around US employment numbers out later today.
Wall Street extended losses on Wednesday as fears deepened that the Federal Reserve will pull back its quantitative easing programme.
Asian markets racked up further losses overnight as investors continued to fret over the prospect of the Federal Reserve reining in its aggressive quantitative easing programme.
London's leading share index has started the week firmly lower, with global sentiment knocked by worse than expected Chinese manufacturing data which had already sparked yet another slump for Japan's stock market.