5:00AM New York, 7:00PM Tokyo - Nikkei declines 7% for the week. Japan’s foreign currency reserves cross $1 trillion in November. Major shareholders back Panasonic’s sweetened offer for Sanyo Electric Co.

Stocks in Japan dropped marginally dragged by financial stocks after Goldman Sachs cut its 12-month price estimate on the country’s biggest banks by as much as 55%.

Paper companies and other domestic economy related stocks trimmed losses as crude oil prices slid 6.7% to $43.67 per barrel. Oil prices have dropped more than 70% since its mid-July peak at $147 a barrel.

In Tokyo trading Nikkei 225 index fell 0.1% or 6.73 to 7,917.51, a drop of 7% for the week, and the broader Topix Index shed 0.5% or 92.36 to 92.33, decline of 5.9% in the week.

In the first section of the Tokyo Stock Exchange 8.4 billion shares worth 611 billion yen were traded and in the second section 133 million shares valued at 1.2 billion yen changed hands.

Of the Nikkei 225 index stocks 86 rose, 131 declined, and 8 were unchanged. Nippon Oil Corp. gained after announcing a merger with Nippon Mining Co. yesterday.

Bill on Bank Recapitalization to Pass Next Week

Nikkei News reported today that a bill that it meant to review the bank recapitalization law is expected to pass through the Diet next week.

The law will give the government the leeway to inject funds into struggling financial institutions.

Separately, Goldman Sachs yesterday slashed its 12-month price estimate on Mitsubishi UFJ Financial Group, Mizuho Financial Group and Sumitomo Mitsui Financial Group by 55%.

“Banks revenues continue to deteriorate, and the impact of macro environment worsening is shifting from the P&L to the balance sheet,” said Goldman Sachs in part of its research note.

In addition Fukuoka’s stock was downgraded to “sell” from “neutral.”

Foreign Currency Reserves Soar to $1 trillion

Japan’s Ministry of Finance reported today that official reserve assets increased by $25.1 billion from the previous month to $1 trillion.

Foreign currency reserves accounted for $976 billion, IMF reserves topped $2.6 billion, special drawing rights stood at $2.9 billion, while gold and other assets contributed $20 billion and $343 million respectively.

Gainers & Losers

Nippon Oil Corp. led advancers in the Nikkei 225 index shares with a rise of 11.2% followed by increases in Nippon Soda Co. of 8.8%, in Fujitsu Ltd of 8.1%, in Daiwa Securities Group of 7.7%, and Mitsubishi Paper of 7.1%.

Nippon Oil Corp. rose after the company announced yesterday that it will be merging with Nippon Mining Holdings.

Mitsubishi Paper gained as oil prices plunged below $45 per barrel. Hokuetsu Paper stock increased 3.6% as a result.

Chugai Pharmaceutical Co. led decliners in the Nikkei 225 index shares with a drop of 8.3% followed by losses in Sumitomo Trust & Banking of 7.2%, in Credit Saison Co of 6.8%, in Mizuho Financial of 6.7% and Isuzu Motors of 5.8%.