Asian Stocks Tumble; Nikkei Falls 6.4%

Updated from 12:26 a.m. EST

Asian stocks declined Tuesday, with the market in Japan tumbling more than 6%, after Wall Street closed with big losses after traders learned the U.S. has been in a recession since December 2007.

Japan's benchmark Nikkei 225 stock average closed down 6.4% to 7,863.69.

Sentiment in Tokyo turned sluggish after the Dow Jones Industrial Average in the U.S. plummeted nearly 8% Monday with a litany of bad economic indicators.

Stocks in New York Monday plummeted after the National Bureau of Economic Research confirmed what many had suspected -- the U.S. has been in a recession for nearly a year. The session was marked by massive profit-taking following a five-day rally in the blue-chip indices.

The Dow plummeted 679.95 points, or 7.7%, to 8149.09, and the S&P 500 fell 80.03 points, or 8.9%, to 816.21. The Nasdaq sank 137.50, or 9%, to 1398.07.

Apart from fears over a prolonged global downturn, the Nikkei index plummeted on heavy selling of exporters on recent gains in the yen, which erodes overseas earnings. Japan's top automaker, Toyota(TM Quote), tumbled 4.1%, and Honda(HMC Quote) dropped 6.9%.

Sony(SNE Quote) fell 4.6%, while rival Panasonic(PC Quote) lost 3.3%.

The Hang Seng index in Hong Kong fell more than 5%, while the S&P/ASX 200 index in Australia dropped 4.2%. Australia's central bank slashed its key interest rate Monday a full percentage point to 4.25% as it tries to prevent the economy from contracting.

In Taiwan, markets were weighed down by a profit warning from Taiwan Semiconductor Manufacturing(TSM Quote), the world's largest chip contractor. Its shares tumbled 7%.