Japan stocks down 2 pct, exporters slip on weak dlr

(Updates to midmorning)

TOKYO, March 13 (Reuters) - Japanese shares fell 2 percent on Thursday, led down by exporters like Honda Motor Co Ltd (7267.T) on the dollar's slide against the yen.

Bank shares also dragged the market down, with Japan's third-biggest lender, Sumitomo Mitsui Financial Group (8316.T), falling 5.9 percent after a 6.4 percent jump the previous day.

The Tokyo market's fall tracked overnight losses on Wall Street after the U.S. Federal Reserve's latest move failed to give a sustained lift to jittery financial markets.

"There is concern for the Japanese economy and corporate earnings. That's why the Tokyo market's fall is bigger than that of Wall Street," said Yoshihiro Ito at Okasan Capital Management.

As of 0147 GMT, the benchmark Nikkei .N225 was down 2.1 percent at 12,587.26. The broader TOPIX index fell 2.2 percent to 1,227.80.

Honda Motor fell 3.1 percent to 2,975 yen, putting the biggest drag on the Nikkei.

The dollar fell as low as 101.10 yen JPY= on electronic trading platform EBS, the lowest since late 1995, before picking up to around 101.40 yen by midmorning.

Sumitomo Mitsui Financial Group lost 5.9 percent to 688,000 yen. No. 1 lender Mitsubishi UFJ Financial Group (8306.T) shed 5.9 percent to 853 yen.

Opposition lawmakers vetoed the Japanese government's pick for central bank governor on Wednesday, leaving the Bank of Japan with no successor to Governor Toshihiko Fukui one week before he retires.

"Distrust in Japanese politics is also helping pushing down the market," said Okasan's Ito.

Daiichi Sankyo Co Ltd (4568.T) fell 4.4 percent to 3,030 yen after U.S. regulators rejected the firm's injectable anaemia drug Injectafer for the broad treatment of uterine bleeding and in a surprise move also knocked it back for a narrower application. [ID:nT246847]

Toshiba Corp (6502.T) slid 1.9 percent to 720 yen after the Nikkei business daily reported that the electronics firm is likely to post a 50 billion yen loss from terminating its HD DVD business, bringing total HD DVD-related losses to 100 billion yen for the year ending in March.

Toshiba will likely post a group operating profit of 250 billion yen for this business year, 40 billion yen short of its forecast, the newspaper said. [ID:nT280760] (Reporting by Taiga Uranaka; Editing by Hugh Lawson)