Kirk Spitzer and Kim Hjelmgaard

USA TODAY

TOKYO — Japanese stocks fell more than 5% Tuesday in their worst day since the summer and the nation's government bonds slid into negative territory — the first time that has happened.

Other markets in Asia also declined amid increasing investor worries over global growth.

Wall Street stock futures were projecting a flat start to trading in New York after Monday's volatile session that saw the Dow Jones industrial average fall by as much as 400 points before cutting that drop in half.

Stocks close slightly lower as oil plunges below $28 a barrel

Tokyo's Nikkei 225 index closed down 5.4% to 16, 085.44. That’s the lowest the Nikkei has closed since August 2015. Japan's broader Topix index fell 5.51%.

The yield on 10-year Japanese government bonds turned negative for the first time ever, falling to 0.030%. Japan has become just the second country after Switzerland with a negative long-term interest rate. The Japanese yen strengthened to 115.35 to the U.S. dollar, the highest since November 2014.

A negative yield on a bond implies that investors are sufficiently anxious that they are prepared to lend money to the government and get back less than they loaned.

Australia’s S&P/ASX 200 index fell 2.8%. India's Sensex index dropped 1.3%. Markets in China and Hong Kong were closed for the Lunar New Year holidays.

Stocks trim losses, Dow halves 400-point dive

The sharp drops came as growth in several major economies has slowed and oil prices have continued to slump. Investors have also been pondering whether the Federal Reserve will modify its stance on interest rates.

"The outlook for the global economy remains too uncertain, with the growth dynamics in the U.S. also moderating," said Simon Smith, an economist at online trading broker FXPro. "Markets are taking the path of least resistance."

European shares dropped for the seventh trading session in a row. Germany's DAX index was off 0.2%. Britain's FTSE 100 index eked out slight gains.

Hjelmgaard reported from Berlin