The broad US stock market sell-off Wednesday took the S&P 500 to the lowest in three months, the Dow Jones Industrial Average plunged as much as 836 points and the Nasdaq 100 Index tumbled more than 4 percent for its worst day in seven years.
The steep drop in Japan followed a decline on Wall Street of almost 830 points, the biggest fall since February, amid Trump's latest criticism of the Federal Reserve, the U.S. central bank.
The US slump, which amounted to a market value loss of over £800bn, had followed falls across much of Europe.
Trader Gregory Rowe works on the floor of the New York Stock Exchange on Wednesday.
"My assumption for the policy rate is that we can achieve our objective of keeping inflation to the 2 percent symmetric objective and the unemployment rate slowly rising back towards its sustainable rate with that stance of funds rate - but if we need more, we'll do more", he said.More news: Samsung Unveils The First Smartphone With Four Cameras
Gina Martin Adams, the chief equity strategist for Bloomberg Intelligence, said investors are concerned about the big increase in yields, which makes it more expensive to borrow money.
Stocks have sold off in recent days on worries about higher borrowing costs. "It's all about investors rethinking their exposure to stocks". As stocks go down, tech goes down more than the stock market, ' she said.
A spike in Treasury yields and solid U.S. economic data have sparked concerns that the Federal Reserve may pick up the pace of its interest rate hikes.
Paint and coatings maker PPG gave a weak third-quarter forecast Monday, while earlier, Pepsi and Conagra's quarterly reports reflected increased expenses.
Powell's goal is to extend the second-longest USA economic expansion on record by moving interest rates up just quickly enough to prevent overheating, but not so rapidly that the central bank chokes off growth.More news: Polio-like disease on the rise in Minnesota
Jasper Lawler, head of research at London Capital Group, offered this explanation: "The bloodbath for global equities comes as investors adjust to a world of higher U.S. interest rates and USA treasury yields". The 10 year U.S. Treasury, a key benchmark for rates, has been spiking and is now at 3.2 percent, one of its highest levels since just after the Great Recession. The yield - what it pays its owner for buying it - climbed above 3 percent in April.
On Wednesday, the Dow fell 831 points, or 3.1 percent, to 25,598. Berkshire Hathaway dipped 4.7 percent to $213.10 and reinsurer Everest Re slid 5.1 percent to $217.73.
Bourses in Paris and Frankfurt both lost more than two%, while London fell 1.3%.
Trump has previously voiced his displeasure with the Fed's rate hikes, saying he would rather shift his focus to the continued growth of the US economy and creating more jobs.More news: Louis Saha rips Paul Pogba for putting pressure on Jose Mourinho