In Tokyo on Wednesday both the Nikkei 225 and the Topix index closed at their lowest level this year.
The Nikkei was down 2.2 percent to 16,475.61, while the Topix dropped 2.6 percent to 1,594.15.
The Mothers market fell 2.66 percent to 751.69.
While Japan’s finance minister said that the problems in the US subprime market “seems to have past its peak”, banks were still lower after Mitsubishi UFJ (TYO: 8306; NYSE: MTU) and Sumitomo Mitsui (TYO: 8316) reported losses involving mortgage-related securities.
Mitsubishi UFJ was 5.3 percent lower to ¥1.08 million after it said its unrealized subprime-related losses amounted to ¥5 billion, while Sumitomo Mitsui was down 5.9 percent to ¥920,000 after reporting that it had lost “billions” of yen in the quarter ending 30 June after it sold ¥350 billion in mortgage-backed securities.
In addition, Orix Corp (TYO: 8591), Japan’s largest non-bank lender dropped 6.6 percent to ¥23,340 even though the company’s president said that it is not exposed to the US subprime market.
Exporters were hurt by a strengthening yen.
Honda Motor (TYO: 7267; NYSE: HMC) was down 2,7 percent to ¥3,920, while Toyota Motor (TYO: 7203.T; NYSE: TM; LSE: TYT) fell 3 percent to ¥6,850.
Construction equipment manufacturer Komatsu (TYO: 6301) dropped 3.9 percent to ¥3,410.
In the electronics sector, Sony (TYO: 6758; NYSE: SNE) was 2.7 percent lower to ¥5,520, while Matsushita (TYO: 6572; NYSE: MC) was down 5 percent to ¥2,015 after mobile phone maker Nokia (OMX: NOK1V; NYSE: NOK; FWB: NOA3) said it would replace Matsushita-manufactured batteries that ran a risk of overheating during recharging.
In the retail sector, Seiyu Ltd (TYO: 8268) - Wal-Mart’s Japanese unit - was 10 percent lower to ¥114 after saying it will post its fifth annual loss in a row, likely in the neighborhood of ¥5.9 billion.
Tokyo Electric Power (TYO; 9501) fell 2.9 percent to ¥3,030 even though the International Atomic Energy Agency reported that an inspection showed that damages from last month’s earthquake looked to be less than had been anticipated.