Japan's Nikkei share average tumbled more than 3 percent on Thursday morning after the U.S. Federal Reserve scaled back stimulus amid emerging market turmoil, while a rise in the yen soured overall sentiment.
The Nikkei dropped 3.3 percent to 14,873.03 in mid-morning trade after falling to as far as 14,853.83, the lowest since November 14. The index's support is seen at 14,731.17, a 61.8 retracement from an October low to a December high.
A spike in the yen soured market sentiment after the Fed, in a widely expected move, cut its bond purchases by another $10 billion to $65 billion a month. The decision sent investors scurrying to the safety of bonds and yen.
Analysts said that the market had priced in the Fed's decision to trim its stimulus by another $10 billion, but was disappointed that it didn't address concerns about turmoil in emerging markets.
"The market was expecting some thoughtful comments about what's happening in emerging market assets as that's something most investors are concerned about now," said Kenji Shiomura, a senior analyst at Daiwa Securities.
The Topix dropped 2.9 percent to 1,219.98.
Sentiment remained fragile with many emerging market currencies under pressure again overnight.
The South African rand fell more than 2 percent to the dollar even after the country's central bank raised rates for the first time in almost six years.
The dollar last traded at 102.15 yen, having fallen from Wednesday's peak of 103.45, hitting exporters as the strong yen hurts their competitiveness as well as their overseas earnings when repatriated.
Toyota Motor Corp (7203.T) shed 2.1 percent and Sony Corp (6758.T) dropped 2.7 percent.
Nintendo Co (7974.T) initially rose more than 7 percent morning on a share buy-back plan but the gain was erased by mid-morning after the company's decision to stick with its hardware platform strategy disappointed investors. Shares of Nintendo - the third-most traded stock - were down 3.7 percent.
Bucking the weakness, stem-cell related stocks jumped, with Takara Bio Inc (4974.T) soaring as much as 10 percent and Trans Genic Inc (2342.T) as much as 16 percent on news scientists have found a simple way to reprogramme mature animal cells back into an embryonic-like state that allows them to generate many types of tissue.
The real estate sector took a hit after Mizuho Securities cut ratings of Sumitomo Realty & Development (8830.T), Mitsubishi Estate Co (8802.T) and Nomura Real Estate Holdings (3231.T) to 'neutral' from 'buy', which fell between 3.2 percent and 4.7 percent.
The JPX-Nikkei Index 400, a recently introduced gauge comprised of firms with high return on equity and strong corporate governance, dropped 2.8 percent to 11,032.44.