TOKYO, JAPAN - Japanese share prices plunged 4.7 percent Wednesday after heavy losses on Wall Street sparked by growing fears of a recession in the United States, dealers said.

They said that a surprise contraction in the giant US service sector triggered concerns that the world's largest economy may be in even worse shape than previously thought.

The Tokyo Stock Exchange's benchmark Nikkei-225 index lost 646.26 points to end at 13,099.24. The broader Topix index of all first-section shares fell 57.07 points or 4.21 percent to 1,298.41.

Turnover rose to 2.508 billion shares from 2.026 billion Tuesday.

Investors dumped shares after Wall Street's Dow Jones index sank 2.93 percent Tuesday.

The sell-off came after the Institute of Supply Management (ISM) reported that the US services sector shrank in January for the first time in nearly five years.

"Recent expectations that financial markets have hit bottom were reversed in one day," said Kazuya Ito, a fund manager at Daiwa SB Investments. "There is persisting underlying instability in financial markets."

Financial stocks were weaker. Japan's largest general leasing company,

Orix, was a limit-down 2,000 yen or more than 11 percent at 16,030 on concerns about the financial health of the group.

Big banks were major losers. Mizuho Financial dropped 25,000 yen or 5.2 percent to 460,000, Mitsubishi UFJ Financial shed 45 yen or 4.4 percent at 977 and Sumitomo Mitsui Financial gave up 25,000 yen or 3.0 percent at 811,000.

Top brokerage Nomura Holdings shed 71 yen or 4.4 percent to 1,538 and major non-life insurer Millea slid 310 yen or 7.2 percent to 4,000.

One bright spot was Toyota Motor, which rose 20 yen or 0.4 percent to 5,800 after the group reported a record third-quarter operating profit.

Mitsubishi Heavy Industries rose seven yen or 1.6 percent to 445 as investors welcomed its better-than-expected earnings.

Nikon rose 85 yen or 3.1 percent to 2,845 on the back of strong earnings. Mitsubishi Motors was down five yen or 2.8 percent at 176 after reporting that its operating profit increased more than eight-fold in the nine months to December.

Japan Tobacco (JT) dropped 5,000 yen or 0.9 percent to 572,000 and Nissin Food Products retreated 280 yen or 7.8 percent to 3,300.

JT said Wednesday that it and Nissin Food Products had decided to drop plans to merge their frozen food businesses after pesticide was detected on frozen meat dumplings and their wrapping imported from China by a JT subsidiary.

On the foreign exchange market, the dollar slipped to 106.58 yen in Tokyo afternoon trade from 106.75 in New York late Tuesday. The euro declined to 156.07 yen from 158.75.