Tokyo stocks fell 1.47 percent in opening trade on Tuesday after Wall Street plunged on deadly explosions in Boston and disappointing Chinese economic growth.
The Nikkei 225 index at the Tokyo Stock Exchange fell 194.67 points to 13,080.99 in the first few minutes of trading.
The safe-haven yen soared Monday.
The yen was changing hands at 96.81 to the dollar in early Asian trade Tuesday, compared with 96.56 yen in New York Monday afternoon and 98.32 yen in Tokyo early Monday.
The euro was at 126.48 yen and $1.3056 early Tuesday against 125.98 yen and $1.3048 in US trade.
A slump in US stocks, the dollar's fall and the Boston bombings were all combining to send the market down, said SMBC Nikko Securities general manager of equities Hiroichi Nishi.
Amid sharp sell-offs in commodities like oil and gold, the Dow Jones Industrial Average was down 265.94 points (1.79 percent) to 14,599.12 at the closing bell, its worst one-day point decline since November.
The broad-market S&P 500 was down 2.30 percent to 1,552.37.
At least two people were killed and more than 100 were wounded when twin explosions struck near the finish line of the Boston Marathon on Monday, officials and media outlets said.
The incident happened about an hour before the US markets closed.