Nikkei slips to hit 3-week low on Wall St, firm yen

                                
 * Nikkei falls 2.2 pct, hits 3-week low on Wall St plunge
                                
 * Activity light before 3-day weekend
                                
 * Short-covering helps Nikkei trim losses
                                
 (Adds stocks, detail)
                                
 By Rika Otsuka
                                
 TOKYO, Nov 21 (Reuters) - Japan's Nikkei average fell 2.2
percent on Friday, striking a three-week low as a stronger yen,
an overnight plunge in U.S. stocks and global recession fears
prompted investors to sell exporters such as Canon Inc <7751.T>.
                                
 Leasing and financial services company Orix Corp <8591.T>
plunged 16.0 percent to 5,200 yen as there are few signs of an
end to the financial crisis that has taken a toll on economies
around the world.
                                
 Orix said on Thursday it would issue 150 billion yen ($1.6
billion) worth of convertible bonds, aiming to pay down
short-term debt and raise investment funds. [ID:nT334044]
                                
 "A sharp slide in the New York market dragged down shares
here," said Shinji Igarashi, an equity manager in the sales
department at Chuo Securities. "Japanese stocks are at the mercy
of external factors such as poor U.S. economic data and selling
by overseas investors."
                                
 The benchmark Nikkei <.N225> was down 170.93 points at
7,532.11 after falling as low as 7,406.18, its lowest since late
October. The Nikkei slid nearly 7 percent on Thursday.
                                
 The broader TOPIX index <.TOPX> fell 2.4 percent to 763.81.
                                
 Trade was thin, with 1 billion shares changing hands on the
Tokyo exchange's first section compared with last week's morning
average of 945 million.Declining shares outnumbered advancing
ones by more than 6 to 1.
                                
 "Domestic institutional investors are taking a wait-and-see
stance ahead of the long weekend," said Hajime Nakajima, deputy
general manager of sales trading department at Cosmo Securities.
                                
 Japanese financial markets will be closed on Monday for a
national holiday.
                                
 The market faced a sell-off in early trade after U.S. stocks
plunged on Thursday as a frantic flight from risk drove the
Standard & Poor's 500 index <.SPX> to its lowest level since
1997. [.N]
                                
 The yen dipped against the dollar on Friday but held near a
three-week high hit beyond 94 yen the previous day as risk
aversion gave the Japanese currency support. [FRX/]
                                
 The yen's firmness prompted investors to sell shares of
exporters. Sony Corp <6758.T> slipped 0.8 percent to 1,811 yen,
and camera and office equipment maker Canon was down 2.3 percent
at 2,550 yen.
                                
 Automakers extended their slide as investors nervously
awaited further developments in Washington's attempt to bail out
cash-strapped U.S. carmakers. [ID:nN20421931]
 Toyota Motor Corp <7203.T>, the world's biggest automaker,
slipped 1.9 percent to 2,890 yen. Honda Motor Co <7267.T> fell
2.5 percent to 1,859 yen after Honda said on Thursday it would
cut another 18,000 units from its planned production in the
United States in response to the downturn in auto sales.
[ID:nN20414430]
                                
 But the market trimmed losses in the morning as investors
felt share prices had fallen enough to price in the slowing
domestic economy.
                                
 "Some bargain-hunting and short-covering set in after the
initial selling, slightly improving the market's mood," Cosmo's
Nakajima said.
                                
 (Editing by Sophie Hardach)