Tokyo stocks opened lower on Thursday as the yen firmed against the dollar after the US Federal Reserve said it will keep rates low given the shaky economic outlook.
The benchmark Nikkei 225 index was down 1.27 percent, or 293.85 points, at 22,831.10 in early trade, while the broader Topix index fell 0.96 percent, or 15.65 points, to 1,609.06.
"Profit-taking sales are leading the Japanese market because of a higher yen against the dollar and US stocks", which ended mostly lower after the Fed announcement, Okasan Online Securities chief strategist Yoshihiro Ito said in a commentary.
The dollar fetched 106.95 yen in early Asian trade, against 107.15 yen in New York on Wednesday.
The Fed confirmed it will keep the benchmark interest rate at zero until the recovery from coronavirus shutdowns is under way, while projecting the US economy would contract by 6.5 percent this year and unemployment would fall to 9.3 percent from its current 13.3 percent.
The Fed's move rattled US equity markets with the dollar pulling back against its major peers.
But Stephen Innes, chief global markets strategist at AxiCorp, warned "the game plan is interrupted by 2,504 new confirmed coronavirus cases reported today in Texas."
The US state of Texas on Wednesday reported 2,504 new infections, the highest one-day total since the pandemic emerged, Bloomberg News reported.
"This number of new cases dwarfs a previous record high of new cases per day," Innes said in a commentary.
"It could be more impactful on market sentiment than anything else today, specifically around equity and oil markets that have been trading favourably on the hope for a virus-free economic recovery," he said.
"The dollar safe-haven appeal could re-emerge as traders may need to hedge for this being more than an isolated event, especially if the domino effect sets in and clusters start to appear all over the maps so soon after economic reopenings," he said.
In Tokyo, banks and exporters were among losers, with Toyota trading down 1.33 percent at 7,000 yen, Canon off 2.22 percent at 2295.5 yen, and Sumitomo Mitsui Financial down 2.74 percent at 3,235 yen.
On Wall Street, the Dow ended down 1.0 percent at 26,989.99.