TOKYO, Sept 29 ― Tokyo's key Nikkei index opened down two per cent today, extending global market jitters, as traders worried about a strengthening dollar, rising oil prices and fears of a US debt default.

The benchmark Nikkei 225 index was down 2.00 per cent, or 602.55 points, at 29,581.41 in early trade, while the broader Topix index fell 2.11 per cent, or 43.83 points, to 2,037.94.

"Japanese trade is seen dominated by sell orders as sentiment worsened after sharp falls in US shares,” senior strategist Yoshihiro Ito of Okasan Online Securities said in a note.

The dollar fetched ¥111.59 (RM4.18) in early Asian trade against ¥111.34 in New York late yesterday.

On Wall Street, weak data, rising bond yields and fears of a debt default caused indices to sink sharply, with the benchmark Dow closing 1.6 per cent lower at 34,299.99, the broad-based S&P falling two per cent and the tech-rich Nasdaq losing 2.8 per cent.

Tokyo investors will later shift their eyes to the result of the ruling Liberal Democratic Party's leadership election later in the day, which will anoint the next prime minister, analysts said.

The race follows Prime Minister Yoshihide Suga's shock announcement that he would not run for head of the ruling Liberal Democratic Party (LDP).

Whoever the party picks in the Wednesday vote will almost certainly be elected as the next prime minister on October 4 at an extraordinary parliament session, and will contest a general election that has to be held by late November. ― AFP