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The benchmark Nikkei index suffered from doubts over whether the European country will default on its debt, closing down 0.6 per cent at 9,351.40, Reuters reports.
According to the news provider, a drop in US manufacturing activity has further soured the atmosphere.
Senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities Norihiro Fujito stated: "Investors are increasingly worried that the US economy is in more serious condition than just a temporary 'soft patch'."
Analysts were also said to be worried about potential hikes in both corporate and income tax in Japan, with the nation's Mainichi newspaper reporting this could be implemented to fund reconstruction projects after a recent earthquake and tsunami hit its north-east coast.
However, Naoteru Teraoka of Chuo Mitsui Asset Management told Bloomberg this will not be going ahead, adding that it is a poor time to invest in the domestic market.
Posted by Greg Secker
