Japanese Shares Drop as Lenders Slump on Deutsche Bank Concerns

(Bloomberg) -- Japanese shares slid, with the benchmark index erasing its September gains, as escalating concerns over German lender Deutsche Bank AG’s capital troubles rippled across global markets.

The Topix index lost 1.9 percent as of 9:08 a.m., heading for a 0.7 drop this month. Deutsche Bank’s New York-listed shares tumbled after Bloomberg News reported about 10 hedge funds doing business with the German lender have moved to reduce their financial exposure. The rout follows a request from U.S. authorities that Deutsche Bank pay $14 billion to settle claims the firm sold fraudulent mortgage-backed securities.

Security	Percent Change	Price
Topix	-1.9%	1,317.88
Nikkei 225	-1.5%	16,441.65
Yen-Dollar	-0.2%	101.21

“Anxiety is spreading,” said Juichi Wako, a senior strategist at Nomura Holdings Inc. in Tokyo. “The bad environment will enclose the whole market, and investors will feel they can’t buy Japanese shares either.”

A gauge tracking Japanese banks dropped 2.4 percent, extending its slide for the week to 7.6 percent. The measure has slumped 30 percent this year, putting it on course for its worst annual performance since the global financial crisis, after the BOJ’s decision to adopt negative in January sparked a selloff on fears the central bank policy will curtail profits.

To contact the reporters on this story: Min Jeong Lee in Tokyo at mlee754@bloomberg.net, Toshiro Hasegawa in Tokyo at thasegawa6@bloomberg.net. To contact the editors responsible for this story: Jeff Sutherland at jsutherlan13@bloomberg.net, Anna Kitanaka, Tom Redmond

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