Japan stocks plunge 12% on panic-selling

Panic selling sent Tokyo shares down 12.18 per cent on Tuesday on worries that Japan's nuclear crisis would become a catastrophe after radiation levels near a quake-stricken nuclear plant surged following explosions and a fire.

The Nikkei index lost 1,171.63 points to 8,448.86 by around 0345 GMT. The Topix index of all first section shares lost 12.52 per cent, or 106.07 points, to 740.89.

Prime Minister Naoto Kan said there was a high risk of elevated levels of radiation from a reactor at the Fukushima nuclear power plant that exploded earlier in the day. He urged people within 30 kilometres of the plant to stay indoors.

Authorities said an explosion at the No. 2 reactor at the Fukushima Daiichi nuclear power plant, located 160 miles northeast of Tokyo, appears to have caused the damage.

Some staff had been evacuated from the facility as radiation levels at the site rose sharply.