Nikkei tumbles to more than 2-week low, growth worries hit export stocks

* Advantest, Tokyo Electron tumble
* Banking, insurers underperform on falling U.S. yields

By Ayai Tomisawa
TOKYO, May 29 (Reuters) - Japan's Nikkei tumbled to a more
than two-week low on Wednesday morning, weighed by companies
with large exposure to China, such as those in the chip sector,
reflecting persistent concerns about U.S.-China trade frictions.
The worries about the trade war and its impact on global
growth drove the a rally in world and local bonds and a selloff
in financial stocks.
The Nikkei share average .N225 dropped 1.4% to 20,966.00
in midmorning trade, after falling to as low as 20,884.61, the
lowest level since May 14.
"Global investors likely decided to unload risky assets as
the status of the U.S.-China trade war has not changed," said
Shoji Hirakawa, chief global strategist at Tokai Tokyo Research
Institute, adding that rising global bond prices are spooking
the market.
U.S. President Donald Trump said this week he was "not yet
ready" to make a deal with China, although he expected one could
be reached in the future. An expanding tariff battle between the
two sides has raised concerns the trade war would lead to a
global economic slowdown. At the same time, he pressed Japan to
reduce its trade imbalance with the United States.
Chip equipment makers Advantest Corp 6857.T tumbled 4.2%,
Tokyo Electron Ltd 8035.T shed 2.7%, while silicon products
maker Sumco Corp 3436.T dropped 2.3%.
Banking and insurer stocks were sold after benchmark U.S.
Treasury yields fell to their lowest levels since September
2017. Mitsubishi UFJ Financial Group 8306.T fell 1.8%,
Sumitomo Mitsui Financial Group 8316.T declined 1.4% and
Dai-ichi Life Holdings 8750.T sank 2.7%.
On the positive side, Citizen Watch 7762.T rose 0.6% after
it said it will buy back up to 2.2% of its own shares worth 3
billion yen. All but three of the Topix's 33 subsectors were in the red.
Declining issues outnumbered advancing ones 1,449 to 592.
The broader Topix .TOPX dropped 0.8% to 1,537.96.

(Editing by Sam Holmes)