Japanese stocks down 2 pct on Wall Street, yen

TOKYO, Mar 14 (Reuters) Japanese stocks fell more than 2 percent on Wednesday, with a wide range of shares including exporters such as Canon Inc. falling on concerns about the U.S.

economic outlook and a stronger yen after U.S. stocks sank on Tuesday in their second-worst sell-off of the year.

Nikko Cordial Corp. was untraded as buy orders overwhelmed sell orders. Citigroup raised its offer for Nikko by 26 percent to .4 billion on Tuesday after a decision by the Tokyo Stock Exchange not to revoke the brokerage's listing sharply boosted its value.

Investors are closely watching other global markets as domestic factors were not behind the drop, said Yutaka Miura, deputy manager of the equity information department at Shinko Securities.

''The Japanese market is weighed down by a fall in U.S. stocks and a stronger yen,'' he said. ''The sell-off is likely to continue for a while, and investors may trade the 16,500 level as the market's bottom line.'' The Nikkei was down 2.13 percent or 365.87 points at 16,812.97 as of 0041 GMT. The broad TOPIX index lost 2.03 percent to 1,690.44.

The dollar fell as low as 115.88 early in the Tokyo session, extending losses after falling more than 1 percent on Tuesday and edging towards 115.16 yen touched earlier in the month for the first time since December.

A stronger yen weighs on exporters as it cuts the value of their overseas sales when converted into the Japanese currency.

Shares in exporters fell, with Canon declining 2.7 percent to 6,140 yen and Honda Motor Co. Ltd. falling 2.6 percent to 4,150 yen.

Nikko Cordial was untraded with bids at 1,690, up 13.4 percent from Tuesday's close.

Citigroup's move came a day after the TSE's surprise ruling not to delist Nikko weakened the U.S. bank's leverage against a group of large North American shareholders who had dismissed its initial offer as too low.

Citigroup is now bidding 1,700 yen per share compared with its previous offer of 1,350 yen.

Reuters AD VP0754