Nikkei sinks 4 pct on stronger yen, U.S. worries

(Adds stocks, details)

By Aiko Hayashi

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 by the dollar's slide to a three-year low against the yen on growing talk 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 it said it may post a loss of up to 30 billion yen ($290 million) on a structured finance transaction hit by the global credit crisis. [ID:nT140738]

Other financial stocks also took a beating on credit worries.

"With a huge drop in U.S. stocks and the sharply firmer yen, the fall can't be helped. Domestic trading factors can no longer calm the market," said Yutaka Miura, deputy manager of the equity information department at Shinko Securities.

"Depending on the outcome of economic indicators from now on, we may have to brace ourselves for the possibility of the Nikkei breaking below the recent low hit in January."

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

On Jan. 22 the Nikkei plunged more than 5 percent to end at 12,573.05, a 28-month closing low and its biggest one-day loss since the session after the Sept. 11 attacks on the United States.