In early trading Friday, Japan's 225-stock Nikkei Index was down 347 points, or 3.9 percent, to 8,552. It had lost as much as 7 percent before making up some of the losses.

The Nikkei, the key Asian market index, also was hit by Toyota Motors' sharp downward revision of its earnings forecast for fiscal 2008, Kyodo news service reported.

"Behind (Toyota's projection) is the deterioration of the global economy,'' Kazuhiro Takahashi, general manager of the global product planning department at Daiwa Securities SMBC Co., was quoted as saying. "Worries about the global economic slowdown are still strong.''

On Wall Street Thursday, the Dow Jones Industrial Average was routed for the second straight day, losing 443 points, or 4.85 percent, to close at 8696. Other indices also fell sharply.

After an initial favorable reaction to the election of Barack Obama as U.S. president, Asia-Pacific investors once again were hounded by concerns about the downturn in the global economy.

Hong Kong's Hang Seng Index was trading more than 7 percent down while South Korea's KOSPI was off 2.3 percent in early trading Friday.

Australia's All-Ordinaries was off 3.77 percent.