(Adds stocks, details)
By Aiko Hayashi
TOKYO, March 3 (Reuters) - Japan's Nikkei average fell 4
percent on Monday, with exporters such as Honda Motor Co Ltd
<7267.T> hurt by the dollar's slide to a three-year low against
the yen on growing talk of a U.S. recession.
Shares of Japanese consumer lender Takefuji Corp <8564.T>
skidded 5.6 percent to 2,515 yen after it said it may post a loss
of up to 30 billion yen ($290 million) on a structured finance
transaction hit by the global credit crisis. []
Other financial stocks also took a beating on credit worries.
"With a huge drop in U.S. stocks and the sharply firmer yen,
the fall can't be helped. Domestic trading factors can no longer
calm the market," said Yutaka Miura, deputy manager of the equity
information department at Shinko Securities.
"Depending on the outcome of economic indicators from now on,
we may have to brace ourselves for the possibility of the Nikkei
breaking below the recent low hit in January."
The benchmark Nikkei <> ended the morning down 545.93
points at 13,057.09 after hitting its lowest level since Feb. 12.
On Jan. 22 the Nikkei plunged more than 5 percent to end at
12,573.05, a 28-month closing low and its biggest one-day loss
since the session after the Sept. 11 attacks on the United
States.
The broader TOPIX index <> was down 3.9 percent or 50.97
points at 1,273.31.
In the United States, investors will watch for the Institute
for Supply Management's (ISM) February reading on manufacturing
on Monday. The government's closely watched employment report for
February is scheduled for release on Friday.
U.S. stocks tumbled on Friday as another round of weak
economic data added to U.S. recession worries and a record loss
at insurer AIG underscored worries about more write-downs in the
financial sector.
EXPORTERS HIT
The dollar extended its slide to below 103 yen, hitting a
three-year low as recession talk sparked a sell-off in Asian
stocks and an unwinding of carry trades.
A stronger yen weighs on Japanese exporters as it cuts into
the value of their overseas sales when translated back into yen.
Yusuke Sakai, manager of equities trading at Mizuho
Securities, said Japanese companies had set their assumed
currency level at around 105 yen to the dollar for the year and
the stronger level had sparked concerns about earnings outlooks.
"We have to be extremely cautious to see if the yen goes
beyond 100 yen as that could worsen investor sentiment."
Honda lost 5.5 percent to 3,080 yen and Toyota Motor Corp
<7203.T> shed 4 percent to 5,520 yen.
Canon Inc <7751.T> slid 4.2 percent to 4,620 yen and Sony
Corp <6758.T> declined 3.8 percent to 4,800 yen.
Financial shares fell, with top bank Mitsubishi UFJ Financial
Group <8306.T> down 3.9 percent at 909 yen, while No.2 Mizuho
Financial Group <8411.T> slid 4.7 percent to 425,000 yen and
Sumitomo Mitsui Financial Group <8316.T> lost 4.2 percent to
740,000 yen.
Shares of Mitsubishi Electric Corp <6503.T> gave up 5.2
percent to 924 yen. It confirmed a newspaper report that it will
exit its loss-making mobile phone business, and said it expects a
one-off pretax loss of about 17 billion yen ($164.1 million) in
the business year ending March 31 due to the withdrawal.
Trade was moderate on the Tokyo exchange's first section,
with 1 billion shares changing hands, compared with last week's
morning average of 963 million.
Decliners totalled 1,645 issues, with just 56
rising.
(Reporting by Aiko Hayashi, Editing by Michael Watson)
