Nikkei down on bank, economy woes; Toyota brakes fall

                                
 * Nikkei touches lowest intraday level since Nov 21
                                
 * Worries about banks, deepening U.S. recession weigh
                                
 * Property firms also hit on lingering credit worries
                                
 * Toyota up on report of production boost, pulls Honda up
 (Adds stocks, details)
                                
 By Elaine Lies
                                
 TOKYO, Feb 18 (Reuters) - Japan's Nikkei stock average fell
1.2 percent on Wednesday, at one point touching a three-month
intraday low, as worries about a deepening U.S. recession and
European bank woes hit financials and property firms.
                                
 But falls were braked by Toyota Motor Corp <7203.T>, which
rose more than 2 percent after the Nikkei business daily reported
it plans to boost production in Japan by about 30 percent in May
compared with the average output of the three preceding months as
inventories fall. [ID:nT143423]
                                
 Obayashi Corp <1802.T> and other construction firms gained on
hopes that government efforts to shore up the ailing economy may
lead to more public works projects.
                                
 But sentiment was fragile after the Dow Jones index <.DJI>
and S&P 500 <.SPX> on Tuesday fell to their lowest levels since
Nov. 20, despite U.S. President Barack Obama signing into law a
$787 billion stimulus package, as weak manufacturing data showed
the recession was deepening.
                                
 "What's happening shouldn't necessarily be affecting the
market that much, since the European bank issue isn't all that
new and the U.S. manufacturing data shouldn't usually have that
much impact," said Hideyuki Ishiguro, a supervisor in the
investment strategy department of Okasan Securities.
                                
 "But ever since the market was disappointed by the U.S. bank
plan, which seemed just to be putting things off, sentiment has
become weak and the market has become sensitive to bad news."
                                
 The benchmark Nikkei <.N225> shed 90.86 points to 7,554.65
after earlier falling to 7,479.18, its lowest intraday level
since Nov. 21. On Tuesday it booked its lowest close since Oct.
28.
                                
 The broader Topix <.TOPX> fell 0.9 percent to 749.94.
                                
 U.S. financial stocks sank to 14-year lows after Moody's
Investors Service said banks could be hit by the recession in
Eastern Europe. [ID:nLH423223]
                                
 Factory activity in New York State fell to a record low in
February, the New York Federal Reserve said on Tuesday,
suggesting that January's minor halt in the worsening of factory
data was an aberration rather than a signal of recovery that
would bring about a rebound in the economy. [ID:nN17499156]
                                
 CREDIT WORRIES, ECONOMIC WOES
                                
 Growing credit worries hit financial and property shares in
Japan, which extended losses from Tuesday.
                                
 Mitsubishi UFJ Financial Group <8306.T>, Japan's top lender,
fell 2 percent to 442 yen and Sumitomo Mitsui Financial Group
<8316.T>, Japan's No. 3 bank, shed 3.7 percent to 3,150 yen.
Second-ranked Mizuho Financial Group <8411.T> lost 1.5 percent to
197 yen.
                                
 Mitsui Fudosan <8801.T>, Japan's largest real estate
developer, lost 3.2 percent to 1,062 yen while Sumitomo Realty &
Development <8830.T> fell 1.1 percent to 993 yen and Mitsubishi
Estate <8802.T> lost 2 percent to 1,067 yen.
                                
 But Toyota rose 2.3 percent to 3,080 yen and Honda Motor Co
<7267.T> gained 1.6 percent to 2,260 yen, partly on a sense in
the market that the steps they have taken to deal with the poor
economy were relatively decisive.
                                
 "The news about Toyota boosting production is also good for
market sentiment, though of course whether or not they will be
able to adequately manage inventory is a different question,"
said Katsuhiko Kodama, senior strategist at Toyo Securities.
                                
 Obayashi surged 6.2 percent to 447 yen and fellow general
contractor Shimizu Corp <1803.T> climbed 4.6 percent to 390 yen.
Kajima Corp <1812.T> rose 6.2 percent to 223 yen.
                                
 Sapporo Holdings <2501.T> sank 4.5 percent to 364 yen after
U.S. fund Steel Partners withdrew a $548 million bid to raise its
stake in the Japanese brewer to a third, citing the beer maker's
deteriorating earnings.
                                
 The stock closed down 9.7 percent at 381 yen ahead of the
announcement on Tuesday, less than half of the Steel Partners
offer price. [ID:nT309432]
                                
 Trade was moderate on the Tokyo exchange's first section,
with 920 million shares changing hands, compared with last week's
morning average of 896 million.
                                
 Declining stocks outpaced advancing ones by 2 to 1.
 (Reporting by Elaine Lies; Editing by Chris Gallagher)