Tokyo shares down on Deutsche Bank worries

Tokyo shares fell Friday as worries about Deutsche Bank's future hammered financial shares.

The weak session followed a slump on Wall Street where Deutsche Bank sank nearly seven percent, after news that a number of hedge funds had pulled money out of the German giant owing to concerns over its financial strength.

"Following the report about clients moving to reduce exposure on Deutsche Bank, the possibility of other financial institutions facing similar moves has surfaced," Hideyuki Ishiguro, a senior strategist at Daiwa Securities, told Bloomberg News.

"Investors, especially foreigners, are moving to cut down on positions in the face of risks arising from European banks."

The benchmark Nikkei 225 index dropped 1.46 percent, or 243.87 points, to 16,449.84. It fell 1.82 percent over the week.

The Topix index of all first section shares was down 1.52 percent, or 20.47 points, at 1,322.78. It lost 1.98 percent on the week.

Among major Japanese banks, Mitsubishi UFJ Financial Group fell 2.11 percent to 505.1 yen, while rival Mizuho Financial Group dropped 2.20 percent to 168.6. Sumitomo Mitsui Financial Group sank 1.51 percent to 3,380 yen.

Sony was down 2.66 percent at 3,293 yen while Toyota dropped 2.01 percent to 5,779 yen.

Sentiment was also hit by another barrage of weak Japanese data, including a 4.6 percent fall in household spending in August, far below market expectations for a drop of around two percent.

Consumer prices also fell 0.5 percent year-on-year, putting the Bank of Japan's two percent inflation target further out of reach.

"While the labour market remains tight, the continued decline in underlying inflation should ring the alarm bells at the Bank of Japan," said Marcel Thieliant at research house Capital Economics.

Friday's data come ahead of the BoJ's closely watched Tankan quarterly business sentiment survey, due Monday.

Economists expect the headline confidence index among large manufacturers to tick up in the October report, according to a Bloomberg survey.

In forex trading, the dollar was weaker at 100.87 yen against 101.04 in New York.

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