Electric power stocks suffered the brunt of the sell-off with Tokyo Electric Power closing down 16 percent and Kansai Electric Power falling 9 percent after Abe didn't provide details on the re-activation of Japan's nuclear plants.
Financials also tanked. NKSJ Holdings, Daiwa Securities and Nomura lost 7 percent each. The moves in Japan's benchmark index suggest that a degree of caution has set in about the success of Japan's economic policies, analysts say.
"They [Japanese government] are drip feeding this news very slowly, hoping not to spook the market. As central banks typically do, they tend to over-promise and under-deliver," said Nick Maroutsous, founder and managing director at Kapstream Capital.
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Shares of Fast Retailing slipped 9.5 percent despite reporting an 11 percent rise in same-store sales at its Uniqlo clothing stores for May.
Australia Down 1.2%
Resource stocks dragged on the benchmark with oil producers Horizon Oil and Maverick down between 5 to 6 percent while gold miners Newcrest and Alacer slipped 5 percent each.
The benchmark hit its lowest levels since January after GDP figures showed that the local economy grew 0.6 percent in the first quarter, compared to market expectations of 0.8 percent.
"The economy is likely to require more help going forward as the mining boom continues to fade. Both in the form of lower interest rates from the RBA [Reserve Bank of Australia] and via a further fall in the value of the Australian dollar," said Shane Oliver, chief economist at AMP Capital in a note.
"Its just a pity these numbers weren't released before the RBA made its decision yesterday!" he added.