Shares in Asia Pacific fell for the third day in a row, as the US insurer AIG made bigger than expected quarterly losses of $7.8bn, triggering worries of further subprime trouble ahead, and two big Japanese companies, the carmaker Toyota and the camera maker Olympus predicted profits would fall as raw material costs rise.

The MSCI Asia Pacific Index had lost 1.2 per cent to 148.94 by late afternoon in Tokyo, its biggest decline since April 14, despite starting the trading day with a small rise.