Japanese shares tumble as US tariffs cloud global economic outlook; automakers skid

Updates with comments

TOKYO, Feb 3 (Reuters) - Japanese shares fell 2% on Monday, led by automakers, as worries grew about the global economy after U.S. President Donald Trump imposed tariffs on Canada, Mexico and China.

The Nikkei .N225 had declined 2.1% to 38,757.43 by 0127 GMT, while the broader Topix .TOPX was down 1.9% to 2,736.08.

The White House said on Friday the United States would impose 25% tariffs on Canada and Mexico, and 10% on China.

Canada and Mexico immediately vowed retaliatory measures, and China said it would challenge Trump's levies at the World Trade Organization.

"Japanese stocks fell amid uncertainties about the global economic outlook, which includes worries that Japanese exports may be a target of Trump's tariff policy in the future," said Kentaro Hayashi, senior strategist at Daiwa Securities.

"Also, if prices rise in the U.S. and the U.S. dollar strengthens, yields will rise. That may affect Japan's monetary policy."

Automakers fell sharply, with Toyota Motor 7203.T losing 4.8% to drag the Topix the most. Honda Motor 7267.T fell 6.7% and Nissan Motor 7201.T lost 5%, with strategists saying their auto production in Mexico is bigger than their Japanese peers'.

"If automakers face higher tariffs, they would have to raise prices and their competitiveness might be hurt," said Fumio Matsumoto, chief strategist at Okasan Securities.

All of the Tokyo Stock Exchange's 33 industry sub-indexes fell, with automaker .ITEQP.T shedding 4.25% to become the worst performer.

The Nikkei volatility index .JNIV rose to its highest since mid-December at 25.33.

Game maker Konami Group 9766.T jumped 12.7% to become the biggest support to the Nikkei.

Of the more than 1,600 stocks trading on TSE's prime market, 85% fell and 12% rose, with 1% trading flat.