Nikkei falls 2.1 pct, exporters sold on yen, Wall St

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By Taiga Uranaka

TOKYO, Nov 27 (Reuters) - Japan's Nikkei average fell 2.1 percent on Tuesday, with exporters such as Canon Inc (7751.T: Quote, Profile, Research, Stock Buzz) bearing the brunt of selling that followed sharp gains in the yen against the dollar and an overnight slide in Wall Street shares.

Bank shares were also hit, tracking falls in U.S. financial stocks amid renewed concerns about problems the subprime mortgage sector.

"Forex moves are hurting market sentiment. The yen's gains are fuelling concerns about corporate earnings," said Tomomi Yamashita, a fund manager at Shinkin Asset Management.

He said the market has been suffering from a sell-off by funds, which are closing long positions on stocks that had led the market, such as trading houses, energy firms and shippers.

The fall might have been less sharp if the market had not received an extra boost on Monday from a report a Chinese fund planning to buy Japanese stocks, Yamashita said.

"We didn't need that news. The market would have gained anyway," he said.

Citing unnamed company sources, the Nikkei business daily reported on Monday that China Investment Corp (CIC), Beijing's new $200 billion sovereign wealth fund, had begun trying to recruit strategists specialising in Japanese stocks and other investment products. [ID:nT295336]