Tokyo stocks have closed 1.53 per cent lower, giving up early gains as the yen strengthened on the back of poor US retail sales data.
The benchmark Nikkei-225 index shed 221.71 points at 14,313.03 on Friday. It slid 1.03 per cent this week, falling for the sixth straight week since the start of the year.
The Topix index of all first-section shares dropped 1.33 per cent, or 15.92 points, to 1,183.82.
The slump came as traders moved into the yen - seen as a safe-haven currency in times of turmoil - after an unexpected drop in US January retail sales, as well as weaker-than-expected first-time jobless claims data for last week.
A stronger yen tends to weigh on shares of Japanese exporters as it's bad for their profitability.
In forex markets, the US dollar fell below Y102, fetching Y101.69 in Tokyo on Friday afternoon from Y102.15 in New York Thursday afternoon.
"The flagging dollar, the weak fundamental data and the fact that individual investors seem to be more inactive after taking heavy losses in January are all combining to lessen support at current levels," said an equity trading director at a foreign brokerage.
"When markets are trending up, people want to keep trading, but they can only go down so far before they take their losses and go home," the trader told Dow Jones Newswires.
Kirin Holdings plunged 9.19 per cent to Y1,293 after the brewer forecast a fall in its fiscal year operating profit.
Sumitomo Rubber fell 3.67 per cent to Y1,338 after US partner Goodyear said it was dissolving the firms' longstanding alliance over allegations of anti-competitive behaviour.
Canon stock shed 0.39 per cent to Y3,013 after the camera and copier maker said it would acquire US-based Molecular Imprints to develop a new microchip-making device.
No financial details were released, but Japan's leading Nikkei business daily said the deal was worth over Y10 billion ($A109.25 million).
