Japanese shares fell on Friday, as risk sentiment was hit after China's plans to impose a new security legislation on Hong Kong fuelled worries over Sino-US tensions.

The benchmark Nikkei average dropped 0.8% to 20,388.16, after erasing earlier gains. But for the week, the index gained 1.8%, logging its first weekly rise in two.

A big fall in Hong Kong's Hang Seng index, which last quoted down 5.2%, especially pressured investor sentiment.

"As soon as Hang Seng started to fall, Japanese stocks and US futures followed suit," said Takeo Kamai, head of executions services at CLSA in Tokyo. The broader Topix declined 0.9% to 1,477.80, with all but three of the 33 sector sub-indexes on the Tokyo exchange finishing lower.

Highly cyclical mining, sea transport and iron and steel were the three worst-performing sector sub-indexes on the main bourse.

The Nikkei's heavyweight SoftBank Group Corp advanced 2.8% as the tech conglomerate said it plans to sell 5% of its domestic telco SoftBank Corp as part of a programme to raise $41 billion through asset sales. SoftBank Corp shed 4.1% on the announcement.

Skylark Holdings slid 2.9% after the restaurant chain operator cut its mid-year dividend estimate to zero, citing the need to preserve cash amid the coronavirus crisis.

Elsewhere, Japanese bio-pharma startup AnGes Inc, which is planning to develop a COVID-19 vaccine, added 1.3%.