Japanese Stocks Tumble as Concerns About U.S. Financials Mount

By Patrick Rial

July 15 (Bloomberg) -- Japanese stocks fell on concern U.S. banks will collapse amid mounting credit market losses and after a newspaper report Japan's top three lenders hold more than $40 billion in Fannie Mae and Freddie Mac debt.

Mizuho Financial Group Inc., the country's third-biggest bank by market value, fell for the first time in five days. Mitsubishi UFJ Financial Group Inc., the biggest, was untraded with the shares offered lower.

U.S. financial shares posted their steepest slide in eight years yesterday, and Fannie Mae and Freddie Mac fell in spite of a rescue plan from the Treasury Department. The Nikkei newspaper said today Japan's three largest lenders hold 4.7 trillion yen ($44.2 billion) in debt securities of the mortgage lenders.

The Nikkei 225 Stock Average declined 181.10, or 1.4 percent, to 12,829.06 as of 9:08 a.m. in Tokyo. The broader Topix index slumped 17.61, or 1.4 percent, to 1,263.11.

``Even with the U.S. government working to resolve the problems among financial companies, we are not going to see any quick resolution,'' Mamoru Shimode, Tokyo-based chief equity strategist at Deutsche Bank AG, said in an interview with Bloomberg Television. ``The banks' holdings of Fannie and Freddie debt are a concern.''

To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net.