Tokyo Shares Fall as Hopes for Fed Tightening Dim

Japanese stocks declined Friday as hopes for an imminent rate increase by the Federal Reserve waned.

The Nikkei Stock Average fell 87.92 points, or 0.5%, to 19283.54. The index gained 0.3% this week.

Investors continued to trim bets that the Fed would tighten further in March after the central bank's latest policy-meeting minutes lacked a clear signal.

Shares of insurers and banks dropped, tracking lower bond yields in the U.S. and Japan. So-called cyclical stocks, which had benefited from the prospect of U.S. fiscal stimulus, stronger U.S. growth and a higher dollar, were hurt by some profit-taking.

Dai-ichi Life Holdings fell 1.4% to 2,175.0 yen. Major bank Sumitomo Mitsui Trust Holdings lost 0.9% to Y4,168. Construction machinery maker Komatsu fell 5.4% to Y2,710.5. Steel maker JFE Holdings dropped 2.1% to Y2,156.0.

Toshiba remained volatile, ending up 4.1% at Y223.9 after falling 4.3% on Thursday and jumping 22% on Wednesday.

Yoshinori Ogawa, strategist at Okasan Securities, said that despite recent developments at Toshiba, there were few changes to its underlying problem.

Mitsubishi UFJ Financial Group  dropped 0.8% to Y758.4 despite news that the company will move into online retail banking in the U.S. to boost dollar deposits.

Write to Kosaku Narioka at kosaku.narioka@wsj.com