TOKYO: Tokyo's key Nikkei 225 index plunged more than two percent at the open on Tuesday, extending Wall Street falls on contagion fears from the expected collapse of debt-plagued Chinese property giant Evergrande.
The benchmark Nikkei 225 index dived 2.07% or 630.51 points to 29,869.54 in early trade, while the broader Topix index fell 2.21% or 46.36 points to 2,053.81.
Evergrande, one of China's biggest developers, is on the brink of collapse as it wallows in debts of more than $300 billion.
There are fears that Chinese authorities may not be able to contain the fallout of the firm's potentially disorderly collapse, which could affect many other companies and poses contagion risks, experts say.
"The Japanese market, which was closed on Monday, is expected to be dominated by sell-orders, with investors discouraged by the global market rout over the financial crisis at China's Evergrande," senior strategist Yoshihiro Ito of Okasan Online Securities said in a note.
"The market will continue to be volatile, with trading volume already expected to shrink" ahead of the US Federal Reserve's meeting this week, he added.
The dollar fetched 109.45 yen in early trade, against 109.38 yen in New York.
Among major shares in Tokyo, Nippon Steel was off 3.39% at 2,080 yen, Panasonic was down 2.19% at 1,382 yen, and Sony slipped 0.79% to 12,225 yen.
Honda was down 2.90% at 3,348 yen after it said its domestic output in Japan in the August-September period would be 40% of its initial plan due to parts shortages.
Shinsei Bank was down 0.73% at 1,882 yen and SBI Holdings was down 2.49% at 2,764 yen after the bank said it was introducing takeover defence measures against SBI's bid.
On Wall Street, the Dow ended down 1.8% at 33,970.47, the broad-based S&P finished down 1.7% and the tech-rich Nasdaq fell 2.2%.