Tokyo stocks nosedived Friday with the benchmark Nikkei stock index ending the week at one-month low, tumbling more than 3 percent following the central bank reporting a slump in quarterly business sentiment which saw a swathe of issues unloaded.

The 225-issue Nikkei Stock Average dropped 594.51 points, or 3.55 percent, from Thursday to close the day at 16,164.16, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange lost 45.80 points, or 3.40 percent to end at 1,301.40.

Traders here pointed to the Bank of Japan's (BOJ) Tankan survey released this morning coming in below median market expectations as compounding investors' fears that Japan's economy may be heading for another technical recession, as recent indicators, including a 6.2 percent plunge in industrial production continue to paint a bleak economic outlook for the world's third-largest economy.

Local brokers also said expectations were now far higher for imminent action from the central bank to unroll further easing measures to underpin markets, despite having already plunged its interest rates into negative territory in a bid to try and redirect essential funds from the banks holdings back into the economy to little effect.

Along with market players here, leading global economists have suggested that "Abenomics" has failed as a second recession under Prime Minister Shinzo Abe looms, meaning that an already delayed tax hike may be put off further and a snap election called, despite Abe's claims to the contrary.

"There may be growing voices that Abenomics has failed. There will likely be more pressure for the administration to come up with stimulus measures and more calls to delay the planned consumption tax hike," said Nobuhiko Kuramochi, a strategist at Mizuho Securities.

Other analysts suggested that the BOJ survey, revealing the largest deterioration in business sentiment in almost three years, would prompt the central bank to take action as early as this month at its next policy meeting.

"The weak Tankan results show that the country's economic picture remains sluggish due to the global economic slowdown and is dragging down Tokyo stocks. The weak readings are likely to put pressure on the BOJ to take further action at its policy meeting late this month," Nomura Securities Co.'s Maki Sawada said.

With the yen rising versus it's U.S. counterpart, exporters duly retreated on the last trading day of the week on lower profit outlooks and diminishing returns from overseas yields when they're repatriated on unfavorable currency exchanges, and Honda Motor reversed 4.7 percent to 2,942 yen, while Mazda Motor skidded down 5.2 percent to close at 1,655 yen.

Panasonic plunged 12.1 percent to 908 yen after announcing it would unlikely hit its 10 trillion yen (89 billion U.S. dollars) sales target in the business year starting April 2018, as its restructuring efforts have yet to gain fiscal traction.

Daiichi Sankyo, was also among hefty losers, falling 4.5 percent to 2,390 yen after announcing a business plan that did little to inspire investors and market confidence.

Trading volume on the main section increased to 2,579.27 million shares from Thursday's volume of 2,225.49 million shares, with the day's turnover totaling 2,657.0 billion yen (23.63 billion U.S. dollars).

Declining issues far outpaced advancing ones on the first section by 1,860 to 70.