The benchmark Nikkei 225 index was down 118.57 points to 16,002.88 at the start.
The dollar was at 104.83 yen early Thursday, hardly changed from 104.82 yen in New York Wednesday afternoon but down from rates slightly above 105 yen in Tokyo late Wednesday.
A stronger yen is negative for Japanese exporters as it makes them less competitive abroad and erodes repatriated profits.
The euro fetched $1.3572 and 142.29 yen compared with $1.3574 and 142.26 yen in US trade.
US stocks Wednesday closed mostly lower after Federal Reserve meeting minutes showed most Fed policymakers believed the US economy could withstand reduced monetary stimulus.
The Dow Jones Industrial Average fell 0.41 percent to 16,462.74.
The minutes documented the discussion that preceded the Fed's December 18 announcement to trim asset purchases by $10 billion to $75 billion a month beginning in January.