The Nikkei 225 Index fell 1.1% to below 47,800, while the broader Topix Index slipped 0.8% to 3,177 on Friday, ending a two-day winning streak as Japanese shares tracked overnight losses on Wall Street.
Sentiment soured after two US regional banks reported bad loans, reigniting concerns about broader credit market risks.
Heightened US-China trade tensions and the prolonged US government shutdown further dampened risk appetite.
Domestically, investors faced added uncertainty as opposition parties have yet to agree on the ruling Liberal Democratic Party’s October 21 proposal to hold a vote for a new prime minister.
Losses were broad-based, led by major decliners including SoftBank Group (-2.9%), Disco Corp (-3.6%), Advantest (-2%), Mitsubishi UFJ (-2.5%), and Tokyo Electric Power (-3.2%).
For the week, both the Nikkei and Topix indexes are on track for modest declines.