Asian financial stocks fell sharply on Tuesday amid fears that their exposure to debt securities issued by Fannie Mae and Freddie Mac, the troubled US mortgage lenders, could hurt bank earnings and slow economic growth in the region.

Shares in Japan’s big three banks – Mitsubishi UFJ (MUFG), Mizuho and Sumitomo Mitsui – were some of the worst performers in the region after it was revealed that they had a total of Y4,700bn ($45bn, €28bn, £22bn) in exposure to debt securities from US mortgage corporations.