Japan stocks slide over 2 pct as exporters, banks drag

(Updates to midsession)

TOKYO, May 26 (Reuters) - Japan's Nikkei average slid 2.2 percent on Monday, led lower by exporters such as Canon Inc (7751.T) on a firmer yen and after U.S. stocks booked their worst week in three months on record oil prices, which stoked fears about inflation and weaker consumer spending.

Banks, including top lender Mitsubishi UFJ Financial Group (8306.T), also slid amid concerns about additional losses at their U.S. peers due to falling commercial property prices, on top of the subprime problems, said Takahiko Murai, general manager of equities at Nozomi Securities.

The benchmark Nikkei average .N225 shed 312.35 points to end the morning session at 13,699.85, beaking below the key 25-day moving average of 13,845.75.

The broader Topix index declined 2.1 percent or 28.53 points to 1,348.16. (Reporting by Aiko Hayashi)