Numerous casualties are feared after a tsunami and earthquake measuring 8.9 on the Richter scale hit Japan.
The earthquake struck the North-East of Japan, triggering the tsunami, just before the close of trading in Tokyo.
By the close the Nikkei 225 index was down 1.72 per cent. The FTSE saw a fall of 0.63 per cent in early trading to stand at 5808.65, while the Dax fell 1.09 per cent.
Other Asian markets have also fallen with Hong Kong Hang Seng down 1.8 per cent.