Chiyoda Corp led decliners, slumping 14.09%, followed by losses in Nippon Mining House of 13.94%, in Dainippon Sumitomo of 8.73%, in Kubota Corp of 7.26% and Pioneer Corp of 7.11%.

Financial stocks declined, weighed down by losses declared in sub-prime portfolio of the U.S. securities firm Morgan Stanley and weak earnings from General Motors and AIG.

Morgan Stanley wrote down its portfolio by $3.7 billion. Separately, American International Group reported third quarter earnings plummeted 27%. General Motors Corp also announced a $39 billion quarterly loss, worst quarterly loss ever.

Mitsubishi UFJ Financial Group slipped 3.21%, Mizuho Financial Group, slumped 3.43% and Sumitomo Mitsui Financial Group fell 2.92%.

The yen firmed against weak dollar at 112.52 from 112.54 against the dollar. Exporters fell on weak dollar led by a loss in Sony Corp of 2.36%. Toyota Motor slipped 4.19% but Honda Motor climbed down 2.91%.

Brewer Kirin Holdings announced has agreed to acquire National Foods, Melbourne, Australia based dairy and fruit juice unit owned by San Miguel Corporation, for 294 billion yen, inclusive of a 200 billion yen debt.

National Foods, with 19 plants located in Australia of the total of 24 plants it owns, sells dairy products branded Pura Milk, Beri juices, King Island Dairy, Farmers Union and has Australian rights to Yoplait yoghurt.

National Foods generated revenue of A$1.84 billion and generated A$0.17 billion in the fiscal year 2006 ending in December and employs 3,500 people.

Kirin is trying to diversify its reliance from beer sales as younger population is increasingly opting for healthier alternative to beer. Kirin Holdings revised downwards its full year profit first year profit forecast by 3.6% to 54 billion yen.