Tokyo’s Nikkei index lost 6 per cent by midday, hitting a 26-year low.

G7 countries warned that the surging yen posed a threat to Japanese exports as the world's second-largest economy tumbles toward recession.

Japanese Prime Minister Taro Aso asked ministers to consider emergency measures to stabilise the stock market, including government purchases of shares and relaxing rules on recapitalisation of banks.

Other indexes are not doing much better, Seoul was down by 4 per cent by midday even as the country's central bank slashed its key interest rate by 0.75 per cent for the second time this month in a bid to boost the economy and reverse the market's recent slide.

Hong Kong slipped by 4.2 per cent; Shanghai, by 3.61 per cent; Taipei, by 4.65 per cent; Manila, by 12.3 per cent; Jakarta, by 6 per cent; Bangkok by 6.96 per cent. Singapore and Kuala Lumpur were closed instead for a public holiday.

Crude oil prices were steady at around US$ 64.14 a barrel after OPEC moved to cut production in an attempt to halt rapid declines.