TOKYO, Oct 22 (Reuters) Japan's Nikkei average fell 3.2 percent on Monday in a broad sell-off centred on exporters such as Honda Motor as the yen hit a six-week high against the dollar on worries over the U.S. economy.
The Tokyo market slid to the morning low immediately after the opening, tracking losses on Wall Street and taking the Nikkei and the broader TOPIX index to four-week lows.
''Tokyo and other Asian markets are being pulled down by the large fall on Wall Street last week,'' said Takashi Ushio, head of investment strategy division at Marusan Securities.
''Optimism had driven up U.S. stocks to records, but there are rekindled concerns about the economy's health and the credit crunch there, and that affects the Tokyo market.'' The tumble in Tokyo followed a 2.6 percent fall by the Dow Jones industrial average on Friday, after a bleak outlook from construction equipment maker Caterpillar Inc The world's top maker of earth-moving equipment said several key U.S. industries it serves are in recession.
The benchmark Nikkei ended the morning down 537.27 points at 16,277.10, its lowest since Sept. 25. The TOPIX fell 2.8 percent to 1,546.83, off a low of 1,539.09 hit earlier.
Honda shed 2.6 percent to 3,730 yen. Automakers and other exporters slid as the dollar hit a six-week low of 113.40 yen amid growing worries over the economic outlook in the United States, a key export market for Japanese firms.
But analysts said the Tokyo market's fall is seen limited, as they expect blue-chip companies to report strong results for the April-September first half.
''I think the market's fall should stop at this point. It's gone a bit too far,'' said Kenichi Hirano, operating officer at Tachibana Securities.
The first-half earnings season gets into high gear this week, with Honda, Sony Corp and Nintendo Co Ltd scheduled to announce results on Thursday.
''Japanese companies are expected to confirm their solid performance when they announce first-half results,'' said Marusan's Ushio.
Trade was moderate, with 895 million shares exchanging hands compared to last week's morning average of 844 million shares.
Decliners outnumbered advancers by 1,611 to 76.
KOMATSU SOLD Caterpillar's weak outlook sent its Japanese rivals down.
Shares of construction machinery giant Komatsu Ltd fell 4.2 percent to 3,670 yen. Hitachi Construction Machinery Co Ltd shed 7.2 percent to 4,530 yen.
Kyowa Hakko Kogyo Co Ltd lost 0.4 percent to 1,396 yen after brewer Kirin Holdings Co said it would bid for control of the drug maker. Shares of Kyowa Hakko jumped 17 percent on Friday on the news of Kirin's bid. Kirin shares fell 4 percent to 1,522 yen.
Amid the broad sell-off, consumer lenders gained for the second straight session, after Acom Co Ltd said last week it likely beat its first-half profit forecast, boosting expectations that the worst may be over for the troubled sector.
Acom, Japan's second-largest consumer lender by market capitalisation, rose 4.6 percent to 2,760 yen and smaller rival Aiful Corp jumped 7.9 percent to 2,450 yen.
REUTERS SS RN0932