Nikkei falls 0.9 pct as exporters, chip shares sold

(Updates to midmorning)

TOKYO, May 21 (Reuters) - Japan's Nikkei share average slid 0.9 percent on Wednesday as Toyota Motor Co (7203.T) and other exporters were sold on the yen's gains against the dollar, with additional downward pressure from chip-related shares after their U.S. peers slumped. Banks slid a day after Mitsubishi UFJ Financial Group (8306.T), Japan's largest bank, forecast virtually no growth this year, though it posted a 71 percent rise in fourth-quarter profit as a turnaround in its consumer credit unit helped offset subprime losses. [ID:nT5934]

But resource-related shares clawed higher after oil hit a record near $130 a barrel, with oil and gas field developer Inpex Holdings Inc (1605.T) rising 1.4 percent.

Some traders said the Tokyo market was hurt by oil prices and inflation concerns, which beat Wall Street lower on Tuesday after the U.S. Producer Price Index rose more than expected.

But others were unsure.

"Certainly high oil prices are a concern, but inflation isn't something that just started yesterday. I think it's simply being used as a reason to justify profit-taking after recent rises," said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Securities.

"Worry about the unknown is increasing, though, with a number of U.S. indicators due out next week."

The Nikkei .N225 was at 14,029.37 after shedding 130.72 points. The broader Topix was down 1.4 percent at 1,380.60.

The dollar steadied after falling on Tuesday, and was trading around 103.54 yen, weighing on exporters. A stronger yen means Japanese goods are less competitive overseas and eats into their profits when brought back home.

Canon Inc (7751.T) slipped 2.5 percent to 5,520 yen, while Toyota fell 2.4 percent to 5,300 yen and fellow automaker Honda Motor Co (7267.T) fell 1.8 percent to 3,360 yen.

Chip-related shares were also vulnerable after their U.S. peers stumbled on Tuesday, with the Philadelphia semiconductor index .SOXX down 2.8 percent.

Advantest Corp (6857.T) fell 3.3 percent to 2,655 yen, while Kyocera Corp (6971.T) was down 1.0 percent to 9,930 yen and TDK Corp (6762.T) fell 0.9 to 6,980 yen.

Banks dropped, with Mitsubishi UFJ down 3.6 percent to 1,017 yen, while No. 2 bank Mizuho Financial Group slid 2.8 percent to 526,000 yen and Sumitomo Mitsui Financial Group (8316.T) fell 2.8 percent to 835,000 yen. (Reporting by Elaine Lies; Editing by Hugh Lawson)