Japan stocks fall, banks hit on concerns for economy

(Updates to midmorning)

TOKYO, Dec 17 (Reuters) - Japanese stocks fell for the fourth straight session on Monday, tracking falls on Wall Street after fresh data pointed to a surge in U.S. inflation, dashing hopes for further Federal Reserve rate cuts.

Bank shares like Mitsubishi UFJ Financial Group Inc (8306.T) were sold amid growing concerns about the economic outlook, offsetting gains in exporters such as Honda Motor Co Ltd (7267.T) on the relatively firm dollar.

"There is a prospect of inflation amid economic slowdown in the United States," said Takashi Ushio, head of the investment strategy division at Marusan Securities. "There are also earnings by U.S. investment banks, so it's hard to make a move this week."

Three of Wall Street's biggest investment banks and brokerage firms will report quarterly earnings this week, Goldman Sachs (GS.N) on Tuesday, Morgan Stanley (MS.N) on Wednesday, and Bear Stearns BSC.N on Thursday.

All three major U.S. stock indexes tumbled more than 1 percent each on Friday after a report showing a jump in the consumer price index in November.

Tracking falls on Wall Street, Japan's bank shares dropped, with Mitsubishi UFJ down 1.8 percent to 1,055 yen. Mizuho Financial Group Inc (8411.T) slid 1.6 percent to 552,000 yen and Sumitomo Mitsui Financial Group Inc (8316.T) lost 1.5 percent to 844,000 yen.

As of 0050 GMT, the benchmark Nikkei .N225 was down 0.6 percent at 15,425.93 and the broader TOPIX down 0.5 percent at 1,493.69.

On the bright side, exporters gained on the firm dollar. Honda rose 1.9 percent to 3,770 yen, the biggest contributor to the Nikkei.

Canon Inc (7751.T) climbed 1.5 percent to 5,590 yen and Sony Corp (6758.T) added 1.6 percent to 6,280 yen.

Millea Holdings Inc (8766.T) gained 4 percent to 3,640 yen after Japan's top non-life insurance company said it would buy Lloyd's of London insurer Kiln Ltd KIN.L for 442 million pounds in cash to help it expand overseas. [ID:nT139933] (Reporting by Taiga Uranaka; Editing by Mike Miller)