The slide in consumer confidence in the US hurt exporters in Tokyo, where the Nikkei 225 dropped 1.69 percent to 16,012.83 and the Topix was down 1.71 percent to 1,557.55 on Wednesday.
The Mothers market of small and mid-caps fell 2.09 percent to 716.06.
A major exception to the declines was the internet sector.
In the internet sector, price-comparison site Kakaku.Com (TYO: 2371) gained 15 percent to ¥314,000 after it said it will sell part of its travel information unit to Yahoo! Japan (TYO: 4689).
Yahoo! Japan added 4.6 percent to ¥43,450 on the announcement.
Manufacturers of motor vehicles were mixed on the session.
While Toyota Motor (TYO: 7203.T; NYSE: TM; LSE: TYT) dropped 2 percent to ¥6,530, truck maker Isuzu Motors (TYO: 7202) added 4.4 percent to ¥598 after it said it is planning to raise operating profit by expanding sales overseas.
Camera maker Canon (TYO: 7751; NYSE: CAJ) fell 2.1 percent to ¥6,400, while in Osaka game console maker Nintendo (TYO: 7974; NAS: NTDOY; FWB: NTO) was 3.7 percent lower to ¥52,000. Financial services also saw declines.
Among banks, Mitsubishi UFJ (TYO: 8306; NYSE: MTU) fell 0.9 percent to ¥1.1 million, while Sumitomo Mitusi (TYO: 8316) was down 1.3 percent to ¥890,000.
Broker Nomura Holdings (TYO: 8604; NYSE: NMR; SGX: N33) was 1.6 percent lower to ¥1,987.
The real estate sector was down 2.1 percent as a whole, while Sumitomo Realty & Development (TYO: 8830) dropped 3.3 percent to ¥3,760.