Nikkei slides to 19-month low on wave of selling

(Updates to midafternoon)

TOKYO, Jan 11 (Reuters) - Japanese shares slid to a new 19-month low on Friday as a sudden wave of selling kicked in, with futures leading the cash market lower and retailers extending losses on worries about the domestic economy.

J.Front Retailing Co Ltd (3086.T), Japan's top department store operator, fell by its daily limit after it slashed its full-year outlook on weak clothing sales, and the largest retailer Seven & I Holdings Co Ltd (3382.T) fell 8.3 percent to 2,825 yen.

Selling of property shares also intensified, dragging the market lower. "There's no question that investors are very nervous about entering the upcoming three-day weekend with positions open, especially with large U.S. banks due to announce earnings next week," said Nagayuki Yamagishi, a strategistat Mitsubishi UFJ Securities.

"This shows how truly weak the market is."

The Nikkei average .N225 fell as low as 14,131.14, the lowest since it touched 14,045.53 on June 14, 2006. By 0427 GMT it was at 14,220.56, down 1.16 percent.

The broader TOPIX index was down 1.1 percent at 1,385.99. The fall in Japanese shares came despite a rally on Wall Street after Federal Reserve Chairman Ben Bernanke acknowledged on Thursday that the economy faces increased risks and indicated that the Fed is ready to cut interest rates aggressively to support growth. [ID:nN10198225]

Bank of Japan Governor Toshihiko Fukui said on Friday the pace of Japan's economic growth seems to be slowing due to a drop in housing investment, but the expansion trend is still intact.

J.Front retailing was down 10.72 percent at 833 yen and Seven & 1 was down 7.47 percent at 2,855 yen, becoming the biggest drag on the Nikkei.

Real estate firms extended losses from Thursday, when Credit Suisse issued a note to clients in which it forecast that the credit crunch would lead to a slowdown in global funds flowing into Japan's real estate market.

Tokyu Land Corp (8815.T) was down 6.21 percent at 815 yen and Sumitomo Realty & Development Co (8830.T) slipped 5.2 percent to 2,345 yen.

Property funds tumbled after Asset Managers Co (2337.OJ) cast a cloud over the outlook for the sector with a sharp downward revision to its profit forecasts. Creed Corp 8888.T fell 18.7 percent to 174,000 yen and Kenedix Inc (4321.T) was down by 16.9 percent at 148,000 yen. (Reporting by Elaine Lies, Editing by Michael Watson)