Tokyo stocks lost 1.27 percent by the break on Thursday after a huge sell-off on Wall Street following US President Barack Obama's election victory while a stronger yen weighed on Japan's exporters.
The benchmark Nikkei 225 index at the Tokyo Stock Exchange was down 113.51 points at 8,859.38, while the broader Topix index of all first-section issues gave up 1.08 percent, or 8.09 points, to 737.62.
US stocks plunged Wednesday with the blue-chip Dow diving 2.36 percent to finish at 12,932.73, its first close below 13,000 in three months.
Obama's Republican challenger Mitt Romney had been favoured by markets for his lower-tax, less-regulation stance.
But a bigger worry is that a still-divided Congress could again lead to deadlock on fiscal reforms, allowing the so-called "fiscal cliff" package of spending cuts and tax hikes to take effect on January 1.
If Congress fails to agree how to cut spending over the medium term, there will be automatic deep spending cuts that could tip the United States back into recession in a major blow for the slowing global economy.
"Immediately the re-election parties ended, markets returned to the daunting issue of the US fiscal cliff," CLSA equity strategist Nicholas Smith told Dow Jones Newswires.
Also weighing on sentiment was the European Union on Wednesday cutting its economic growth forecast for the region -- a key market for Japanese exports -- and worries about the impact of economic woes on European powerhouse Germany.
In Tokyo trade, the stronger yen weighed on exporters, with Canon falling 2.56 percent to 2,504 yen and Sony down 2.29 percent to 893 yen.
On forex markets, the dollar weakened to 79.83 yen, from 79.96 yen in US trade, while the euro bought $1.2760 and 101.92 yen in Tokyo trade, from $1.2767 and 102.09 yen.