TOKYO - JAPANESE share prices lost more than two per cent in early trade on Thursday as a massive US bailout of insurance giant AIG failed to calm a financial market storm.

The benchmark Nikkei-225 index lost 304.76 points or 2.59 per cent to 11,445.03 in the first 10 minutes of trading.

The Dow Jones Industrial Average slid 4.06 per cent on Wednesday in the second massive loss in three sessions as global markets suffered more turbulence.

The US Federal Reserve agreed to a loan of up to US$85 billion (S$121.5 billion) to stave off collapse at AIG and help limit financial market contagion.

But fears mounted that the Fed action might not be sufficient to shore up wobbly financial markets.

Worries about British bank HBOS and US thrift Washington Mutual also dragged down stocks around the globe, and Russian markets closed after a new meltdown, brokers said. -- AFP