* Japan Display tumbles after co says it had yet to reach agreement for tie-up with external party
* Suruga Bank soars after report it's talking to 4 firms for financial assistance
By Ayai Tomisawa
TOKYO, April 10 (Reuters) - Japan's Nikkei dropped to a one-week low on Wednesday as escalating trade tensions between the United States and Europe and worries about the global growth outlook sapped investor confidence.
U.S. President Donald Trump said he would impose tariffs on $11 billion of European goods, raising fears that differences over aircraft subsidies could morph into a wider trade war.
Not helping the mood, the International Monetary Fund cut its global economic growth forecast and said a sharp downturn could require world leaders to coordinate stimulus measures.
The Nikkei share average ended 0.5 percent lower at 21,687.57, the lowest closing level since April 3.
All 33 of the Topix's subsectors were in negative territory, with cyclical machinery and technology stocks underperforming.
"While there were developments between the U.S. and China, the next thing the market is worried about is European tariff matters. This news is stoking concerns that the U.S. may target other regions in the future," said Nobuhiko Kuramochi, a strategist at Mizuho Securities.
Sony Corp tumbled 2.5 percent, Hitachi Ltd and TDK Corp both dropped 1.6 percent and Nintendo Co declined 1 percent.
Elsewhere, Japan Display Inc dived 8.1 percent after saying it had yet to reach an agreement for a tie-up with an external party that it had said would be sealed by the first half of this week.
Moving in the opposite direction, Suruga Bank jumped 16 percent after the Nikkei business daily reported that the bank is talking to four companies including Nojima Corp and SBI Holdings for financial assistance.
Japan Post Holdings slumped 2.9 percent after Japan's Ministry of Finance said it is inviting banks to bid for a role in its third share sale in the holding company.
The broader Topix dropped 0.7 percent to 1,607.66. (Editing by Shri Navaratnam)