Japan's Nikkei index fell for a third straight session on Friday to end at a near two-week low, tracking Wall Street overnight losses, as investors were worried about an economic slowdown in the world's largest economy.

The Nikkei share average fell 1.73% to 25,935.62, its lowest finish since June 20, after rising as much as 0.5% earlier in the day. For the week, the index fell 2.1%.

The broader Topix lost 1.38% to 1,845.04 and posted a 1.1% weekly loss.

"Investors were concerned about the outlook of U.S. economy," said Shoichi Arisawa, general manager of the investment research department at IwaiCosmo Securities.

Wall Street ended lower overnight, with the benchmark S&P 500 posting its steepest percentage drop for the first six months since 1970, amid concerns over the Ukraine-Russia war, soaring inflation, higher interest rates and, more recently, a possible U.S. recession.

In Japan, heavyweights fell, with Uniqlo owner Fast Retailing slipping 4% to become the biggest drag on the Nikkei. Chip-making equipment maker Tokyo Electron lost 3.7%.

Mitsubishi Corp fell 5.38% and peer Mitsui & Co lost 5.51% after Russia moved to create a new firm to take charge of the Sakhalin-2 oil and gas project in the country's far east.

The new firm will take over all rights and obligations of Sakhalin Energy Investment Co, in which the two Japanese trading companies and Shell Plc hold just under a 50% stake.

"The news about the rights for the Sakhalin project dented investor sentiment as well," said Arisawa.

Travel-related stocks were weak, with airlines. and railways losing 3.05% and 1.03%, respectively, amid a recent rise in the number of domestic COVID-19 cases. The real estate sector lost 0.82%.

Shares of departmental stores rose, with Takashimaya surging 8.8% and J.Front Retailing gaining 1.12%, after their profits turned to positive in the latest quarter.

(Reporting by Junko Fujita; Editing by Rashmi Aich)