Nikkei is down 10% from January high

• Japan's Nikkei index suffers double blow of risk aversion and strong Yen.
• Trades below 22K.

The risk aversion in the global markets and the resulting Yen strength is weighing heavily over the Japan's benchmark equity index Nikkei.

As of writing, the Nikkei is down 3.88 percent on 21,806 levels. The January high was 24,129, meaning the index has dropped 10 percent in the last few days (including today).

The negative price action seen today is in line with the blood bath on Wall Street. The Dow index fell 1175 points, pushing the VIX index above 35.00. As per Bloomberg report, more than $1 trillion has been wiped out of US equities.

The resulting carry unwind pushed the Japanese Yen higher across the globe. For instance, USD/JPY fell from 110.29 to 108.99 yesterday. Meanwhile, the 10-year Treasury yield fell from 2.88 percent to 2.75 percent.

Clearly, investors have been spooked by the rising bond yields in the US.