* Nikkei on track for weekly, monthly loss, though up for quarter
* Bank, financial shares slip on concerns about Deutsche stability
TOKYO, Sept 30 (Reuters) - Japan's Nikkei slipped on Friday after fears about the stability Deutsche Bank shook Wall Street and took a toll on financial shares, with the Japanese stock index on track for weekly and monthly losses.
By the end of morning trade, the Nikkei was off 1.6 percent, or 258.10 points, at 16,435.61, down 1.9 percent for the week and 2.6 percent for September. It was still up 5.5 percent for the July-September quarter.
Wall Street indexes posted sharp declines on Thursday, with Deutsche Bank's U.S.-listed stock skidding 6.7 percent as deepening concerns over the stability of the lender cast a cloud over markets around the world.
"Financial and bank stocks are down today, which is dragging down the overall market, as well as sentiment," said Ayako Sera, market economist at Sumitomo Mitsui Trust Bank.
"The latest fears remind investors of the Lehman shock," she said, referring to the 2008 bankruptcy of the U.S. financial firm Lehman Brothers that sent shockwaves around the world.
"This time, there is supposed to be a safety net in place to prevent a major impact on global markets, but there are still many unknowns about this current situation, and a shortage of information," she said.
The banking subindex slipped 1.9 percent and the securities subindex lost 1.8 percent, while the subindex of other financials was down 2.6 percent and the insurance subindex shed 2.3 percent.
Nissan Motor Co was down 2.5 percent after its CEO Carlos Ghosn warned the automaker could scrap a potential new investment in the country's biggest car plant if Britain did not pledge compensation for any tax barriers resulting from its decision to leave the European Union.
Other factors also weighed on market sentiment.
"People are very nervous going in to next week, with risk factors including the U.S. election and economy, with payrolls coming out next week," said Stefan Worrall, director of Japan equity sales at Credit Suisse in Tokyo. "So it's normal to expect volatility in an air pocket of uncertainty."
A spate of mixed economic data released before the market opened underscored the challenge faced by the government and Bank of Japan, to meet inflation targets and stoke growth.
"Investors are moving away from Japanese stocks due to their perception that no structural reforms such as lower taxes or reduced tariffs are on the legislative table for economic policies," said Hiroki Allen, chief representative of Superfund Japan in Tokyo.
The broader Topix was down 1.5 percent at 1,322.95, while the JPX-Nikkei Index 400 also slipped 1.5 percent to 11,841.05. (Reporting by Tokyo markets team; Editing by Shri Navaratnam)