Banks, brokerage and other financial stocks fell on the worries that continued uncertainty in the U.S. mortgage market may have hidden liabilities in Japan. Mitsubishi Trust fell 3.6%, Daiwa Securities declined 4%, Nomura Holdings dropped 3%, and Mizuho Financial Group and Shinsei Group fell 2.5%.

Toyota jumped 1.4% to7,180 yen after reporting 32% rise in earnings on sales increase of 16%. The earnings in the quarter of 491.5 billion beat the estimates of most analysts on higher international sales. Toyota unit sales declined in Japan but sales in rest of Asia, Europe, and the U.S. increased. The company also guided its annual unit sales out look to 8.89 million units.

Export sensitive stocks fell on the worries that strengthening yen will crimp profits of electronics and machinery companies. Canon fell 2.5% to close at 6,370 yen.

Sony fell 3% to close at 5,930 yen on rising yen and worries that a delay in launch of revised version of popular game from Take Two Interactive may affect Sony PlayStation 3 sales.

Consumer, industrial and stocks not related to financial markets managed to close higher. NGK Insulators jumped 6%, Japan Tobacco advanced 4%, Kubota Corp rose 2.6%. West Japan Railways increased 2.6% and East Japan railways edged 1.5% higher. Fall in oil prices lifted stocks of utilities and oil refining companies. Inpex Holdings, Nippon Mining, All Nippon Air, Nippon Express, and Kansai Electric Power jumped more than 1%.

Mitsubishi Electric led the stocks in Nikkei Index after its joint venture with Hitachi Renesas Technology expects its China sales to double in the next four to five years.