TOKYO (REUTERS) - Japan's Fast Retailing Co, owner of the Uniqlo casual wear brand, will suspend all but critical travel to Bangladesh and has told staff there to stay home after 20 people, including seven Japanese, were killed in an attack that began late Friday.

Bangladesh's US$26 billion (S$35 billion) garment industry has been bracing for the fallout of the killings at a Dhaka restaurant, fearing major retailers from Uniqlo to Marks and Spencer and Gap Inc could rethink their investment after the latest attack targeting foreigners.

Uniqlo has 10 Japanese staff in Bangladesh, one of its major production hubs outside China, and was among the first to confirm that it will tighten travel restrictions, already in place after attacks on foreigners last year.

A spokesman said all but critical travel was suspended.

Industry analysts have suggested brands could now consider shifting out of Bangladesh and into other, less unsettled, countries in the wider region from Cambodia to Sri Lanka. But no major producer has yet signalled official plans.

"There are no plans in changing any sourcing, but we are following developments closely," Sweden's H & M said in a Sunday statement echoed by other major retailers.

Bangladesh, one of the world's poorest countries, relies on garments for around 80 per cent of its exports and for about 4 million jobs, and ranks behind only China as a supplier of clothes to developed markets like Europe and the United States.