TOKYO: Shares ended 1.13 percent lower in Tokyo on Friday after ratings agency Standard & Poor's downgraded Japan's public debt while downbeat earnings reports also weighed on sentiment, dealers said.
The headline Nikkei index at the Tokyo Stock Exchange fell 118.32 points to 10,360.34 and the Topix index of all first section shares ended 1.07 percent, or 9.97 points, lower at 919.69.
Stocks came under pressure after S&P on Thursday cut Japan's sovereign debt rating to "AA minus" from "AA", accusing the government of lacking a "coherent strategy" in efforts to ease a mountain of debt.
It was the first downgrade of a G7 member since Italy in October 2006, and underlined mounting problems with national debts since the 2008 financial crisis. Four eurozone members including Spain suffered downgrades last year.
The Japanese currency tumbled Thursday following the announcement, with the dollar immediately gaining more than a yen to 83.20 yen from around 82.12 in earlier trade.
But the unit bounced back Friday and was at around 82.65 to the dollar in the afternoon.
"There are signs that foreign investor buying is declining," Okasan Securities strategist Hideyuki Ishiguro said.
The downside pressure also came after a slew of lucklustre corporate earnings results.
"Expectations were quite high for earnings," Naoteru Teraoka, general manager at Chuo Mitsui Asset Management, told Dow Jones Newswires.
"So we are starting to see a gap (between expectations and results) with most companies also cautious about their outlooks."
Videogame giant Nintendo reported its group net profit plunged 74.3 percent for the nine months ended December, hit by a huge foreign exchange loss and a continued sales slump.
Japan's NEC also said its net loss in the October-December quarter almost tripled from a year earlier, blaming a delay in the recovery of IT-related capital investment in the country.
Nintendo fell 1.50 percent to 22,200 yen, NEC fell 4.47 percent to 235 yen and Canon dropped 3.09 percent to 4,065 yen.
Sony eased 0.20 percent to 2,908 despite its announcement on a new portable game console.
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