In a sign of ongoing distress at banks in the wake the subprime mortgage crisis, Citigroup Inc. announced overnight another 53,000 job cuts in the coming quarters. Britain's Sunday Telegraph newspaper reported that JPMorgan Chase & Co. will likely cut thousands of jobs worldwide next year and HSBC Holdings PLC, Europe's largest bank by market value, said it plans to cut 500 jobs in Asia.
The news weighed heavily on Japanese financial firms. Mizuho Financial Group Inc. shed 4.3 percent to 229,800, and Nomura Holdings Inc. plunged 7.3 percent to 776 yen.
Top Japanese bank Mitsubishi UFJ Financial Group Inc. retreated 6.7 percent to 546 yen. Selling accelerated in the afternoon after the Nikkei financial daily reported that the firm would soon announce plans to raise about 600 billion yen in capital by the end of the year through a domestic and overseas public common stock offering.
Major retailers also slid after data Tuesday showed that nationwide department store sales in October fell 6.6 percent from a year earlier, adding to signs of weakening consumer demand.
Consumers are "getting increasingly cautious about spending after the Lehman failure in mid September," said JP Morgan Securities economist Miwako Nakamura in a report.
Major department store operator Isetan Mitsukoshi Holdings Ltd. fell 6.8 percent to 766 yen.
Among the few gainers, Mazda Motor Corp. surged 6.4 percent to 184 yen on speculation that Ford Motor Co. has decided to sell most of its leading 33.4 percent stake in the automaker.
In currencies, the dollar was trading at 96.59 yen Tuesday afternoon in Asia, from 96.38 late Monday. The euro stood at $1.2622 from $1.2639.