Stock markets across Asia have dropped sharply, reflecting similar falls in the US and the EU a day earlier, as fears grew of higher US interest rates.
Traders will be closely watching interest rate movements
The Nikkei fell below the 16,000 mark for the first time in eight weeks and shares dipped by 2.4% during trading.
Japan's drop was echoed in Hong Kong, South Korea, Taiwan, Australia and Singapore, which fell by up to 3%.
Higher-than-expected US consumer prices on Wednesday also worried the markets as oil prices boosted inflation.
South Asian markets followed suit, with Bombay's Sensex index sliding 872 points or 7.1% - a one-day record - to 11,346 points.
Inflation and interest rates
"The market is very afraid of inflation and about the possibility of [US] interest rate increases," said Kim Joong-hyan, a Seoul-based analyst with Goodmorning Shinan Securities.
The higher inflation figures could force the US central bank to raise interest rates further, which could hurt the prospects for economic growth.
"Rather than any domestic factor, I think the decline in US stocks is pretty much 100% responsible for the fall in Tokyo today," said Soichiro Monki, at Daiwa SB Investment.
Higher interest rates also make it more expensive for companies to borrow and thereby eat into company profits.
Mining stocks were particularly affected by the falling markets, with BHP Billiton losing 3.4% in Australia and the country's overall market falling by 1.5%.
South Korean markets dropped to 7-week lows - falling almost 3% - with lender Kookmin Bank, Shinhan Finance group and Samsung Electronics losing 2%.
Falls in Asia came after the US index of leading shares, the Dow Jones industrial average, saw its biggest one-day fall in three years, knocking off $64bn from the value of the top 30 firms listed in the index.
Similarly Britain's FTSE 100 index lost 170 points - its biggest one-day fall since October 2002 - and £123bn was wiped off the value of Europe's top 300 firms on Wednesday.
Also prompting the fall across markets Wednesday was the release of eurozone inflation figures, which rose faster than expected to 2.4% in April.
This increases the likelihood of a rate increase by the European Central Bank next month from its existing 2.5% level.
Some analysts are saying that recent market upheaval could be a forerunner to more serious turmoil, with a sharp turnaround in expectations about the future course of inflation and interest rates worldwide.