Nikkei falls 1 pct as blue chips sold

(Updates to midmorning)

TOKYO, April 22 (Reuters) - Japan's Nikkei average fell 1 percent on Tuesday, led down by blue chips such as Honda Motor Co Ltd (7267.T: Quote, Profile, Research, Stock Buzz) and Canon Inc (7751.T: Quote, Profile, Research, Stock Buzz) as investors locked in profit after a five-day winning streak.

Nomura Holdings Inc (8604.T: Quote, Profile, Research, Stock Buzz) fell nearly 3 percent after an investigation was launched into Japan's largest brokerage. [ID:nTFA003078]

"It's quite natural for the market to take a breather after the five straight days of gains," said Fumiyuki Nakanishi, group manager of the investment research department at SMBC Friend Securities.

The Nikkei had gained 6 percent in the previous five days on receding pessimism about the credit crisis as investors took comfort in earnings by U.S. banks and other firms.

Bank of America (BAC.N: Quote, Profile, Research, Stock Buzz) was the latest to report, posting on Monday a 77 percent decline in quarterly profit, as a growing number of consumers and real estate developers failed to repay loans. [ID:nN21410537]

As of 0037 GMT, the benchmark Nikkei average .N225 fell 132.04 points to 13,564.51. The broader TOPIX index lost 1.1 percent to 1,316.36.

In a broad sell-off, financials also fell, with Japan's largest bank, Mitsubishi UFJ Financial Group (8306.T: Quote, Profile, Research, Stock Buzz), down 2 percent to 1,024 yen. Nomura slid 2.8 percent to 1,657 yen.

Nippon Steel Corp (5401.T: Quote, Profile, Research, Stock Buzz) fell 1.1 percent to 565 yen after the Nikkei business daily reported on Tuesday that Japan's top steelmaker plans to ask automakers and other customers to accept a nearly 40 percent increase in prices for its mainstay steel products to offset soaring raw materials prices.