Japan stocks tumble on U.S. recession fears

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By Taiga Uranaka

TOKYO, Feb 6 (Reuters) - Japan's Nikkei share average fell more than 4 percent on Wednesday, led by banks and exporters such as Honda Motor Co Ltd (7267.T: Quote, Profile, Research, Stock Buzz) on growing fears of a U.S. recession and a spate of outlook cuts by Japanese companies.

Mitsubishi UFJ Financial Group (8306.T: Quote, Profile, Research, Stock Buzz), Japan's No.1 bank, fell 4.2 percent as banks came under pressure on U.S. warnings that lenders could be hurt by credit downgrades on U.S. bond insurers.

"It can't be helped. The market is taking a hit from U.S. recession fears," said Yoshihiro Ito at Okasan Capital Management.

The benchmark Nikkei average .N225 ended the morning down 4.1 percent at 13,178.16. The broader TOPIX index fell 3.7 percent to 1,305.03, with declining stocks swamping advancers by nearly 27 to one on the Tokyo exchange's first section.

"The impact of subprime problems is spreading into the broader U.S. economy, and a growing number of Japanese companies are cutting their profit outlooks," Ito said.

Alps Electric Co (6770.T: Quote, Profile, Research, Stock Buzz) fell 7.7 percent to 1,146 yen after it cut its annual net profit forecast, citing a likely earnings decline in the audio equipment business and an asset-impairment charge in its electronic parts division.

Concern that the U.S. economy is heading for a downturn flared up again after data showed the U.S. services sector slowed in January to levels not seen since the 2001 slump. [ID:nN05112825]