Japan's Nikkei sinks 4 pct on weak dlr, US worries

(Updates to midsession)

TOKYO, March 3 (Reuters) - Japan's Nikkei average fell 4 percent on Monday, with exporters such as Honda Motor Co Ltd (7267.T: Quote, Profile, Research, Stock Buzz) hurt after the dollar touched a three-year low against the yen on growing fears of a U.S. recession.

Shares of Japanese consumer lender Takefuji Corp (8564.T: Quote, Profile, Research, Stock Buzz) skidded 5.6 percent to 2,515 yen after the firm said it may post a loss of up to 30 billion yen ($290 million) on a structured finance transaction that has been hit by the global credit crisis. [ID:nT140738]

Other financial stocks also took a beating on credit worries.

The benchmark Nikkei average .N225 ended the morning session down 545.93 points at 13,057.09 after hitting its lowest level since Feb. 12.

The broader TOPIX index was down 3.9 percent or 50.97 points at 1,273.31. (Reporting by Aiko Hayashi)