Nikkei falls 2.3 pct on fresh U.S. financial worry

* Nikkei falls 2.3 percent to one-month closing low

* U.S. financial worries hit banks

* Exporters, recent gainers lose ground (Adds stocks, details)

By Taiga Uranaka

TOKYO, Aug 19 (Reuters) - The Nikkei average sank 2.3 percent to a one-month closing low on Tuesday as investors sold exporters and banks on renewed concern that U.S. financial woes are far from over.

The sell-off came after U.S. stocks tumbled on the prospect of more losses from the mortgage crisis, with shares in Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac tumbling after Barron's reported the U.S. Treasury may need to bail out the home finance giants.

"As (thin) trade volume shows, investors have been scared away," said Masayuki Otani, chief market analyst at Maruwa Securities.

"There are concerns about the corporate profit outlook, U.S. financial woes are lingering, and the U.S. and Japanese economies are on a downslope. Unless at least one or two of these turn for the better, investors won't start feeling the bottom has been reached," he said.

Adding to the bleak macroeconomic picture, the Bank of Japan cut its assessment of the economy on Tuesday while keeping its interest rate target unchanged at 0.50 percent by a unanimous vote, as widely expected.

The central bank said in a statement that economic growth had been sluggish due to weaker growth in exports and high energy and raw material prices. But it stuck to the view that the economy would eventually return to moderate growth.

The benchmark Nikkei .N225 ended down 300.40 points at 12,865.05. The broader Topix declined 2.2 percent to 1,235.54.

The market was also weighed down by growing concerns that China's red hot growth might be rapidly cooling.

"With the Olympic Games half over, investors have started paying attention to negative news on the Chinese economy," said Hiroyuki Nakai, chief strategist at Tokai Tokyo Research Center.

"The United States and China are the two wheels driving the Japanese economy, and with both of them faltering the slowdown in the Japanese economy could be a prolonged one," he said.

JGC BUCKS TREND

Plant engineering firm JGC Corp bucked the trend and rose 3.3 percent to 1,968 yen after Nomura Securities raised its rating to "buy" from "neutral", saying the firm is likely to enjoy strong demand for energy-related plants.

Exporters were among the hardest hit, with Canon Inc down 3.8 percent at 5,140 yen and TDK Corp falling 5.3 percent to 6,440 yen, the two biggest drags on the Nikkei.

Financials were also battered amid fears of more problems to come from their U.S. peers. Japan's No.3 lender Sumitomo Mitsui Financial Group declined 2.7 percent to 682,000 yen.

Koito Manufacturing Co Ltd plunged 6.8 percent to 1,256 yen after UBS Securities cut its rating to "neutral" from "buy".

Analyst Kunihiro Matsumoto said in a note to clients that while the auto parts maker is expected to put in a solid performance in Asia, production cuts by Toyota Motor Corp as well as U.S. and European automakers are likely to put pressure on the firm's earnings.

Trade was light on the Tokyo exchange's first section, with 1.6 billion shares changing hands, compared with last week's daily average of 1.9 billion.

Declining stocks outpaced advancing ones by nearly 9 to 1. (Reporting by Taiga Uranaka; Editing by Michael Watson)