Japan Nikkei slips nearly 2 pct, exporters drag

(Updates to midmorning)

TOKYO, Aug 13 (Reuters) - Japan's Nikkei average fell on Wednesday despite economic data that was in line with market forecasts, with Canon Inc (7751.T) and other exporters down on a stronger yen.

The Nikkei was down 1.8 percent by midmorning, but market players said the GDP data was as expected and having less of an impact than a Wall Street slide the day before. Banks slid in the wake of falls by their U.S. peers, with Mitsubishi UFJ Financial Group (8306.T) down more than 3 percent after saying on Tuesday it would bid $3 billion to buy the remaining 35 percent of California's UnionBanCal Corp UB.N that it does not already own. [ID:nT366224] Chip-related firms also slid, with computer antivirus company Trend Micro Inc (4704.T) tumbling more than 5 percent after predicting a fall in operating profit for the next quarter.

Japan's economy shrank 0.6 percent in the second quarter, as expected, reinforcing views it may have slipped into a recession after its longest period of expansion since World War Two, but market players said the impact was limited, and a string of gloomy economic news recently meant the market had factored it in.

"Basically this was as the market had thought, so it's not really having much of an impact. What happened on Wall Street overnight is much bigger," said Fujio Ando, senior managing director at Chibagin Asset Management.

Renewed worries about losses from the mortgage crisis and concerns about the U.S. economy sent financials there sliding, dragging down the market as a whole after news that JPMorgan Chase (JPM.N) had racked up $1.5 billion of losses so far this quarter on mortgage-linked assets sent its stock tumbling more than 9 percent.

The benchmark Nikkei .N225 shed 230.22 points or 1.7 percent to 13,073.38 by 0055 GMT, while the broader Topix fell 1.6 percent to 1,251.59.

The dollar slipped against the yen a day after hitting a seven-month high of 110.40 on the EBS trading platform, fetching around 109.13 yen by midmorning.

As a result, exporters weakened, with Canon slipping 1.5 percent to 5,260 yen and industrial robot maker Fanuc Ltd (6954.T) down 1 percent at 8,750 yen. Chip-linked firms slid as well, with Advantest Corp (6857.T) losing 2.8 percent to 2,470 yen.

Trend Micro tumbled 5.7 percent to 3,500 yen, becoming the second-biggest drag on the Nikkei 225 by volume weight after the Internet security software firm said its operating profit is likely to fall 15 percent for the July-September quarter, hurt by a stronger yen and marketing expenses.

Banks were battered, with Mitsubishi UFJ down 3.2 percent at 850 yen and No.3 bank Sumitomo Mitsui Financial Group (8316.T) down 2.4 percent at 696,000 yen. (Reporting by Elaine Lies; Editing by Michael Watson)