Market players said appetite for riskier assets was further diminished by investor caution ahead of U.S. jobs data scheduled to be released on Friday.
The Nikkei share average <.N225> fell 1.3 percent to 16,878.96 for its lowest close in nearly two weeks.
Shares of Takata Corp plunged 19.5 percent after Bloomberg News reported the company's worst-case scenario for its recall could involve 287.5 million potentially defective air bag inflators.
The Topix subindex for marine transportation <.ISHIP> shed 4 percent as shares of Japan's shipping companies were heavily sold throughout the afternoon session.
The broader Topix <.TOPX> fell 1.6 percent to end the day at 1,356.29 with each of its 33 subindexes in negative territory.
The JPX-Nikkei Index 400 <.JPXNK400> declined 1.6 percent to 12,249.67.
(Reporting by Joshua Hunt; Editing by Sam Holmes)
By Joshua Hunt
