Japanese automaker led losses on the Japan's benchmark index Thursday, closing lower by 4%.
The sharp fall came after Toyota of about a million vehicles on Thursday.
The safety recall involved certain 2020-2022 Toyota and Lexus models in the United States.
The sell-off also comes after Toyota subsidiary Daihatsu on Wednesday, after an investigation found safety issues with its cars, including cases where airbag control units used in airbag tests for some models were different from the ones sold to the public.
A independent panel had been probing Daihatsu after it in April it had rigged side-collision safety tests carried out for 88,000 small cars, most of those sold as Toyotas.
Japan's wider Nikkei 225 plunged 1.50% Thursday, while the Topix fell 0.9%, dragged down by the safety scandals at Toyota. Most Asia-Pacific markets fell after Wall Street dropped overnight.
