Japanese banks retreated on concern they need to raise more funds as Asian stocks fell as commodity related companies on concern China will step up the efforts to cool growth. With five shares declining for every four that advanced the MSCI Asia Pacific Index fell 0.5 percent to 119.56 as of 1 p. m in Tokyo. The euro today faded that the plan will end the region’s sovereign debt crisis against the dollar.

Mizuho the worst capitalized of Japan’s top three banks at the end December, in a statement said “There was nothing to disclose. Mizuho raised about 530 billion yen in July last year”. The Japanese banks up to now have relied heavily on preferred securities and preferred shares however these may no longer count towards core capital under the new regulations while the banks have been rushing to raise capital to pre empty the pending government move in line with the Basel guidelines.

Chikako Horiuchi, analyst at Fitch Ratings in Tokyo said “An 800 billion yen capital raise would give a boost to Mizuho's capital, but we cannot tell whether it would be enough to meet the new rules since they are not decided yet”. It may be noted that the Mitsubishi, Japanese largest publicly traded bank, fell 1.5 percent to 462 yen. It was the most traded stock by value in Japan and the company now has a gain of as much as 2.6 percent. Fumiyuki Nakanishi, a strategist at Tokyo based SMBC Friend Securities Co said “Investors wanted to see market reactions in the U. S. and Europe after the bailout plan was announced. They’ve regained confidence to invest in risk assets”. Michiya Tomita, a Hong Kong based fund manager for Mitsubishi said “ Investors will want to see how it will be implemented, We’ve been buying stocks a little bit following the recent decline”.