Japanese shares fall after U.S. rate cut
Benchmark Nikkei index drops 0.6% after Federal Reserve cuts key interest rate.
TOKYO (AP) -- Japanese shares fell Thursday as investors sold banking stocks after the U.S. Federal Reserve cuts its key interest rate.
The benchmark Nikkei 225 Stock Average index shed 83.13 points, or 0.6%, to 13,766.86.
"Banks had posted strong gains in the run-up to the FOMC (Federal Open Market Committee) meeting. But once the meeting was over, they took a pause," said Masayoshi Okamoto, general manager at Jujiya Securities.
The U.S. central bank, as expected, cut its key federal funds rate by a quarter-point Wednesday, a smaller move than the aggressive easing it undertook earlier this year. The Fed action pushed the rate down to 2%, the lowest level since late 2004. It was the seventh rate cut by the bank since it began easing credit conditions last September to combat the threat of a recession brought on by the housing slump and credit crisis.
Sentiment was also sluggish after Japan's central bank said in a report Wednesday the world's second largest economy was slowing, with "downside risks" in the U.S. economy a potential threat to Japan.
The Topix index of all the Tokyo Stock Exchange First Section issues declined 12.55 points, or 0.9%, to 1,346.10.
Shares in banking giant Mitsubishi UFJ Financial fell 3.8%. Mizuho Financial dropped 5.0%.
Real estate giant Mitsubishi Estate lost 5.1%, and Sumitomo Realty & Development fell 3.7%.
In currencies, the dollar was quoted at ¥103.72 midafternoon in Tokyo trade, down from ¥104.17 late Wednesday in New York. The euro was quoted at $1.5634, down from $1.5642. 
