Japan's Nikkei average hit its lowest close in four months today as banking shares were sold on persistent worries that more financial firms would tap the market for equity financing and as a stronger yen hurt shares of exporters.
Japan Airlines plunged to a record low on worries about a possible bankruptcy, while consumer lender Takefuji fell nearly 7 per cent after a two-notch downgrade from rating agency Moody's to a level indicating a very high credit risk.
The benchmark Nikkei fell 1 per cent to 9,401.58, its lowest finish since July 17th.
The broader Topix declined 1.1 per cent to 829.22. Tokyo markets were closed for a holiday yesterday.
Finance Minister Hirohisa Fujii said Japanese demand was weak and fiscal policy alone could not revive it, putting pressure on the Bank of Japan to respond to deflation.
Trade was light on the Tokyo exchange's first section, with 1.8 billion shares changing hands, below last week's daily average of 2.1 billion.
Declining stocks outnumbered advancing ones by nearly 4 to 1.
Exporters slid as the dollar stayed near a six-week low of around 88.60 yen hit the previous day. Investors fret about a stronger yen since it eats into exporter profits when repatriated.
Sony fell 1.9 per cent to 2,365 yen and Kyocera slipped 1.3 per cent to 6,950 yen. Toyota shed 1.7 per cent to 3,380 yen.
JAL sank as much as 10.5 per cent to a record low on investor worries the struggling airline could face bankruptcy if it cannot secure an agreement from its pensioners for benefit cuts.
The stock price slide also follows news that Mitsui sold its entire stake of 11.73 million shares in JAL during the six months to September 30th. A spokesman for the trading house did not say why it unloaded its shares, which were less than half of one per cent of the company.
JAL dived 8.4 percent to 87 yen, after earlier sinking to a record low of 85 yen.
Banking shares slid, erasing gains made on Friday.
Third-ranked Sumitomo Mitsui dropped 4.4 per cent to 2,690 yen and no. 2 bank Mizuho Financial Group retreated 2.5 per cent to 154 yen on worries it might follow Mitsubishi Financial Group, Japan's largest bank, in announcing a large
fundraising.
MUFG fell 2.8 per cent to 458 yen.
Reuters