The Japanese government is being forced to consider suspending state spending as it emerged it could run out of cash within a month.
Asian stock markets echoed Wall Street's overnight slump as investors fretted over declining Japanese export figures.
Japan's GDP grew by 0.3% in the second quarter of the year, down from 1% in Q1, as the eurozone crisis hurt exports and domestic consumption remained subdued.
Is value investing dead and buried in this strange, disconcerting stop-start, risk-on/risk-off world?
The chief executive of Japan's Nomura Holdings has resigned following a damaging insider trading scandal.
The euro has slipped to an 11-year low against the Japanese yen as Spanish debt woes continue to weigh on the single currency.
M&A activity among small- and mid-cap stocks in the Japanese market could lead to a long-term rally in equities, according to JO Hambro Capital Management's Ruth Nash.