Nikkei posts worst quarter in over a year

(Adds details on Promise deal)

* Nikkei posts worst quarter in over a year

* Consumer lenders soar on Promise M&A news

* Nikkei stumbles at 25-day moving average again

* Cable and wire producers slide on Furukawa fine

* KDDI shares biggest drag on Friday, phone recall weighs

By Vikram Subhedar and Lisa Twaronite

TOKYO, Sept 30 (Reuters) - The Nikkei share average snapped
a three-day gaining streak to close flat on Friday, posting its
worst quarter in over a year, as pension fund buying faded and
as weakness in other Asian stock markets weighed.

But shares of consumer lenders surged in heavy trading after
a source said Sumitomo Mitsui Financial Group Japan's
No.3 bank, planned to acquire all the stock of consumer lender
Promise Co. that it did not already own. The companies
confirmed the news after the close.

Continued strength in the yen against the euro
hurt exporters after a German vote had earlier boosted hopes
about an eventual resolution to Europe's sovereign debt woes.

"The euro has slipped below 104 yen, which is weighing on
shares of exporters with European exposure," said Toshiyuki
Kanayama, market analyst at Monex Inc.

Window-dressing by fund managers buying some of the
quarter's outperforming issues ahead of the end of the
first-half has helped support shares this week but Friday saw
little support from such buying amid ongoing uncertainty over
European debt woes and their impact on the global economy.

"The fact is that is there is very little non-government
fund buying that is going on right now," said a Hong Kong-based
trader at an Asian brokerage.

"The pension funds were buying this week but they're loathe
to continue doing that right up to the last day when the books
actually close," said the trader.

Also hit by weakness in other Asian stock markets, with
Chinese shares racking up losses on fears of a property market
correction, the Nikkei closed at 8700.29. It stumbled
for the third time this month at its 25-day moving average,
which currently lies at 8,729.56.

For the week, it closed up 1.6 percent but was down 2.8
percent and 11.4 percent for the month and the quarter
respectively. It was its worst quarter since June 2010.

The broader Topix index closed 0.2 percent at
761.17, bringing its losses for the quarter to 10.4 percent.

KDDI , Japan's second-largest mobile carrier, closed
down 3.4 percent and was the biggest drag on the benchmark with
losses in the stock accelerating into the close after it said it
would recall 2 million mobile phones as batteries had
overheated.

Shares of the three major wire and cable producers bore the
brunt of the selling after Furukawa Electric said it
reached a plea agreement with the U.S. Department of Justice to
pay a fine of $200 million for the company's role in an
international price cartel for automotive price harnesses.

Furukawa shares slid 6.2 percent in over twice their average
30-day traded volume. Rivals Sumitomo Electric and
Fujikura fell 8 percent and 6.2 percent respectively
also in heavy volumes.

Promise ended up by its daily limit of 100 yen, a climb of
18 percent at 659 yen. After the bell, SMFG said it would pay
780 yen per share as well as buy new shares to be issued by
Promise in a deal worth $2.7 billion.

Hopes of consolidation in the sector drove up
shares of rival consumer lenders. Aiful Corp surged 7.6
percent to 113 yen with over 18.5 times the average 30-day
traded volume of shares changing hands. Acom rose 2
percent to 1,500 yen.

Isuzu Motors Ltd rose 2.8 percent to 336 yen after
the truck maker said it would strengthen its Thai operations
including by building a new pickup truck factory for 18 billion
yen ($234 million) to boost its annual output capacity by 50
percent to 400,000 vehicles.

Volume was moderate, with 2 billion shares traded on the
Tokyo Stock Exchange's main board . On Thursday, volume
spiked in the last half-hour of trading, bringing total daily
volume to 2.2 billion shares.

About 13 shares declined for every 10 that rose on the
mainboard on Friday.