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Tokyo stocks tumbled 1.80 percent on profit-taking after it hit a four and a half-year high this week and as the yen rebounded from recent lows.
The benchmark Nikkei 225 lost 203.91 points to 11,153.16, with embattled electronics giant Sony falling more than 10 percent on disappointing earnings.
The Topix index of all first-section shares lost 1.22 percent, or 11.83 points, to 957.35.
"Today's aggressive profit-taking is not unusual," Fumiyuki Nakanishi, head of investment and research at SMBC Friend Securities, told Dow Jones Newswires.
"The index looks likely to find strong support in the low 11,000 area, but in the end this depends on currencies, as a weaker yen trumps all other factors."
The Nikkei finished in negative territory on Thursday, a day after it surged almost four percent to its best finish since September 2008.
The Tokyo market has soared in the past couple of months as the yen dropped on the back of a new conservative government in Japan pledging to fix the economy with big spending and aggressive monetary easing.
However, the Japanese unit was stronger against the dollar and euro in afternoon forex trade Friday.
The dollar bought 93.49 yen from 93.61 yen in late New York trade Thursday, while the euro slipped to 125.36 yen, from 125.40 yen.
The Japanese unit had been as low as 94.06 and 127.71 earlier this week, thanks to expectations of further Bank of Japan monetary easing as well as rising confidence in the global outlook.
On Wall Street the Dow provided a soft lead for Tokyo investors, ending 0.30 percent lower at 13,944.05 after edging close to a record high last week.
Official data Friday showed the surplus in Japan's current account, the broadest measure of trade with the rest of the world, nearly halved on-year to 4.7 trillion yen in 2012, the smallest since 1985, as exports to Europe and China slumped.
In Tokyo trade, Sony tumbled 10.13 percent to 1,365 yen, on weak financial results, although its net loss from April to December was 75 percent lower on-year and it said it remains on track to achieve a full-year profit.
Small-car maker Suzuki was off 5.39 percent to 2,280 yen, with earnings missing expectations.
Fujitsu climbed 5.08 percent to 434 yen, as it announced restructuring plans, including thousands of layoffs, following a loss of nearly $1.0 billion in the nine months to December.