Hefty losses for Japanese banking stocks helped condemn the Nikkei 225 Average to a fourth successive weekly decline for the first time in more than a year.
The benchmark indicator shed 0.5 per cent on Friday to close at a four-month low of 9,497.68 – it is down 2.8 per cent over the five-day period.
The broader Topix index fell 3.2 per cent to 838.71.
At the heart of the banking sector’s woes lay worries about fundraising to meet stricter capital requirements.
Mitsubishi UFJ, Japan’s biggest bank, announced that it would tap the market for up to $11bn, a record, prompting fears that others might follow suit.
The sector sub-index fell 6 per cent over the week with MUFG down 7.3 per cent to Y471, Mizuho Financial11.7 per cent weaker at Y158 and Sumitomo Mitsui Financial off 13.1 per cent to Y2,815.
Sony came under pressure as its new growth strategy, unveiled on Thursday, failed to reassure investors. The stock fell 2.4 per cent on Friday to Y2,410, leaving it 5.5 per cent down over the week.
Japan Airlines also had a difficult week as the stock slid to its lowest level since relisting in 2002. The latest problem for the struggling carrier stemmed from reports that it would have to pay about Y100bn to settle derivatives transactions. JAL denied the report.
Earlier in the week, Seiji Maehara, Japan’s transport minister, unsettled the market by warning that bankruptcy remained a possibility for the airline.
JAL shares fell 10.4 per cent over the week to Y95.
Other stock markets across the region put in mixed performances.
Shanghai reached a three-month high before easing back on Friday. The Composite index finished at 3,308.35, up 3.8 per cent over the week – its third successive weekly advance.
Energy stocks were buoyed as heavy snowfalls hit China. Changchun Gas soared 38 per cent to Rmb10.59, including a 10 per cent surge on Friday.
Yunnan Wenshan Electric Power gained 8.7 per cent over the week to Rmb9.40 after Beijing raised retail power prices for non-residential users.
Hong Kong’s buoyant run ran out of steam as the Hang Seng index hit heavy resistance at the 23,000 level. The benchmark indicator slipped 0.4 per cent to 22,455.84, having gained 3.3 per cent in the previous week.
China Mobile, the world’s biggest telecommunications group by market value, bucked the softer tone as its shares rose 3.8 per cent over the week to HK$76.55 after it said its business had rebounded to pre-crisis levels.
Mumbai enjoyed a third week of gains in spite of fears that India might tax foreign capital inflows.
The BSE Sensex rose 1 per cent over the week to 17,021.85, leaving it with a gain of more than 76 per cent so far this year.