Nikkei down 2.8 pct on earnings, recession jitters

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By Aiko Hayashi

TOKYO, April 14 (Reuters) - The Nikkei stock average fell 2.8 percent on Monday, with exporters such as Canon Inc (7751.T: Quote, Profile, Research, Stock Buzz) hit by a stronger yen and further evidence the United States may be in recession, while KDDI Corp (9433.T: Quote, Profile, Research, Stock Buzz) tumbled after cutting its profit forecast.

U.S. stocks slumped on Friday after surprisingly weak earnings from General Electric Co (GE.N: Quote, Profile, Research, Stock Buzz) and data showing consumer sentiment at a 26-year low fed fears the economy is in recession.

"General Electric's results must be evidence of an eroding U.S. economy," said Fujio Ando, a senior managing director at Chibagin Asset Management.

"It was an earlier sign than expected of a non-financial company's report being hurt by the credit crisis, although I had expected it from European and U.S. financial institutions... By association, investors have become jittery ahead of Japanese corporate earnings season."

The benchmark Nikkei average .N225 finished the morning down 373.93 points at 12,949.80. It finished Friday up 2.9 percent, ending a three-day losing streak, and gained 0.2 percent for the week.

The broader TOPIX index declined 2.5 percent or 31.68 points to 1,246.94.

The dollar rose as high as 101.97 yen <JPY=> earlier, up from around 101.00 yen in late New York trade, but later trimmed its gains to stand at 101.17 yen.