TOKYO: Tokyo stocks lost 0.51 percent Wednesday amid renewed worries over the European debt crisis and the size of a bailout fund designed to help the bloc's most indebted nations.
Financial stocks took a hit after ratings agency Standard & Poor's downgraded its assessments of 15 global banks.
The Nikkei 225 index at the Tokyo Stock Exchange closed down 43.21 points at 8,434.61. The Topix of all first section shares fell 0.17 percent, or 1.22 points, to 728.46.
"Continuing jitters about the European debt situation and weak Asian markets are hanging over Japan stocks," said Masatoshi Sato, a senior strategist at Mizuho Investors Securities.
Eurozone finance ministers have decided to expand the 440-billion-euro European Financial Stability Facility (EFSF), with fresh help from the International Monetary Fund, but are likely to fall short of a one-trillion-euro target.
European leaders will hold a summit on December 8-9, amid global pressure on them to contain a crisis that is also threatening to engulf Spain.
Meanwhile, Standard & Poor's on Tuesday said it had downgraded the ratings of major banks, including Citigroup, Goldman Sachs, and JPMorgan Chase.
Japanese banks avoided downgrade, but the agency slapped a "negative" outlook on Sumitomo Mitsui Financial Group and Mizuho Financial Group, putting pressure on Tokyo-listed bank shares.
Sumitomo Mitsui fell 1.04 percent to 2,089 yen, while Mizuho dropped 0.99 percent to 100 yen.
Sony lost 1.43 percent to 1,372 yen, Toyota Motor fell 0.79 percent to 2,509 yen and Nintendo dropped 0.68 percent to 11,630 yen. Mobile carrier NTT DoCoMo lost 0.14 percent to 135,000 yen.
The euro traded at $1.3318 and 103.80 yen in Asian trade, compared with $1.3317 and 103.66 yen in New York late Tuesday.
The dollar firmed to 77.94 yen from 77.87 yen.
The Nikkei was given a weak lead from Wall Street where the Dow, which closed 0.28 percent higher, was weighed by news that American Airlines had filed for Chapter 11 bankruptcy protection.
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