Tokyo's benchmark Nikkei index closed down 2.72 percent lower on Friday as worries over the spread of the new coronavirus intensified, pushing the yen higher against the dollar.
The key Nikkei 225 ended down 579.37 points at 20,749.75 while the broader Topix index ended down 2.92 percent or 44.25 points at 1,471.46.
The dollar dipped below 106 yen in Tokyo hours and "that prompted further sell orders", Yoshihiro Ito, chief strategist at Okasan Online Securities, said in a commentary.
Expectations that the Bank of Japan would move to expand buying of exchange trade funds to support the market prompted some bargain-hunting purchases in early trade "but disappointed investors are now selling" as no such move by the central bank was seen, he added.
The dollar fetched 105.87 yen in late Tokyo hours, against 106.14 yen in New York on Thursday, where the Dow ended down 3.6 percent on fears of the virus's spread in the United States.
In Tokyo, exporters and banks were lower alike, with Toyota dropping 3.05 percent to 6,794 yen, Sony ending down 3.24 percent at 6,704 yen, Sumitomo Mitsui Financial off 4.01 percent at 3,176 yen, and Mitsubishi UFJ Financial down 3.65 percent at 487.4 yen.
Seven and i Holdings surged 5.89 percent to 3,842 yen after a report the convenience store and supermarket operator scrapped plans to acquire the US oil refining firm Marathon Petroleum's Speedway gas stations for $22 billion.
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