A major earthquake shook a large part of Japan on Friday afternoon sparking a large tsunami that swept away houses, buildings and cars along Japan's eastern coast.

The earthquake hit at 2:46 pm (5:46 am GMT) and measured magnitude 8.8, according to the US Geological Survey. It was centred 10 kilometres below the Pacific Ocean, off Miyagi prefecture.

The Pacific Tsunami Warning Center issued a tsunami warning that extended across a large part of the Pacific, including Russia, Taiwan, Indonesia and Guam.

Buildings in the Japanese capital shook violently and items were knocked off shelves. Railway and subway lines stopped, expressways were closed and a nuclear power station automatically stopped. Several fires were sparked in Tokyo.

Power outages were reported across a wide part of Japan and telephone service, both wired and wireless, was disrupted with many calls going unconnected.

The quake measured 7 on the Japanese scale of 1 to 7 in Miyagi prefecture. The quake, which was the strongest felt for years in Tokyo, was followed by several aftershocks.

On the financial markets, the yen dropped sharply soon after the quake.