Japan stocks fall, exporters hurt by weaker dollar

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By Taiga Uranaka

TOKYO, March 13 (Reuters) - Japanese shares fell 2 percent on Thursday, led down by Honda Motor Co Ltd (7267.T: Quote, Profile, Research, Stock Buzz) as the dollar's slide against the yen was seen hurting Japan's export-dependent corporate profits.

The dollar hit a 12-year low against the yen <JPY=>, falling below 101.00 yen at one time.

"The yen's gain and concerns about the Japanese economy and corporate earnings are pulling down the Tokyo market deeper than Wall Street," said Yoshihiro Ito at Okasan Capital Management.

He said the market is likely to see a volatile session throughout Thursday, the last day before settlement of index futures and options. "There are few buyers in such a rough session, and that is adding to the market's fall," he said.

The benchmark Nikkei average .N225 ended the morning session down 2 percent at 12,600.05. The broader TOPIX index fell 2.2 percent to 1,227.16.

Bank shares also dragged the market down, with Japan's three largest banks erasing hefty gains from the previous session as investors are demanding to see more than the Fed's latest action to ease strains in credit markets.

"It's a sign that providing liquidity is not enough," said Takahiko Murai, general manager of equities at Nozomi Securities.