Nikkei falls to 4-month closing low, banks slide

By Masayuki Kitano

TOKYO (Reuters) - Japan's benchmark Nikkei share average fell 1.3 percent to a four-month closing low on Thursday, with the nation's biggest bank Mitsubishi UFJ Financial Group sliding after announcing a massive fundraising.

MUFG fell 3.7 percent to 466 yen after saying on Wednesday it would raise $11 billion to meet stricter capital rules, the latest in a wave of fundraising that has seen Japanese companies already raise $40 billion through issuing common stock and convertible bonds this year.

Shares fell in heavy volume, and exporters took a hit as the yen rose against the dollar and other currencies, with Honda Motor Co falling 3.5 percent to 2,740 yen.

"With the capital raisings, the yen's strength and politics, there is three times the pain," said Tomomi Yamashita, a fund manager at Shinkin Asset Management.

Concerns about the fiscal and economic policies of the new Democratic Party-led government have weighed on Tokyo shares in the past few months.

The benchmark Nikkei fell 127.33 points to 9,549.47, its lowest close in four months.

The Nikkei fell earlier to a four-month intraday low of 9,496.07, edging down towards support at the 200-day moving average that now lies at 9,337.29.

The broader Topix index, which broke below its 200-day moving average last week, slid 1.5 percent to 837.71, its lowest closing level in nearly seven months.