Nikkei falls 1.8 pct, global economy worries weigh

*Nikkei fell 1.8 percent, giving up some of Monday's gains

*Exporters hurt by firmer yen, global economy outlook

*Shippers slide after a drop in a key freight index (Adds stocks, detail)

By Aiko Hayashi

TOKYO, Sept 9 (Reuters) - The Nikkei average fell 1.8 percent on Tuesday, a day after the U.S. government's bailout of top mortgage firms sparked a broad market rally, with exporters sliding on a firmer yen and uncertainty over the global economy.

Shippers such as Kawasaki Kisen Kaisha dragged the market lower after a key freight index fell to its lowest point in more than a year, while bank shares dropped after posting double-digit percentage gains on Monday.

"Today is the day after the party," Fujio Ando, senior managing director at Chibagin Asset Management.

"In hindsight, yesterday's rally was merely caused by the buying back of oversold shares."

On Monday, the Nikkei average jumped 3.4 percent, posting its biggest gain in five months, with financial shares soaring on the U.S. government's bailout of mortgage finance companies Fannie Mae and Freddie Mac .

"The U.S. market's positive reaction to the rescue plan was not as big as Tokyo had expected, and this forced investors to refocus their attention on the uncertain economic outlook," said Yumi Nishimura, manager of investment advisory at Daiwa Securities SMBC.

Investors were also cautious ahead of earnings from U.S. investment banks, such as Lehman Brothers .

The benchmark Nikkei average .N225 lost 223.81 points to 12,400.65 and the broader Topix shed 2 percent to 1,191.59.

EXPORTERS, SHIPPERS DRAG

Shares of Honda shed 3.6 percent to 3,520 yen, becoming the biggest drag on the Nikkei 225, while Canon Inc declined 2.1 percent to 4,640 yen.

The dollar fell 0.6 percent against the yen to 107.47 yen . Investors fret over a stronger yen as it curbs exporters' overseas profits when they are brought back home.

Shipper Kawasaki Kisen lost 5.9 percent to 659 yen and rival Mitsui OSK Lines skidded 6.9 percent to 1,079 yen.

The Baltic Dry Index .BADI fell 3 percent to hit its lowest since late June 2007, pointing a fall in sea cargo traffic, another indicator of a slowing global economy.

Top lender Mitsubishi UFJ Financial Group slipped 1.2 percent to 840 yen and No.2 Mizuho Financial Group fell 1.3 percent to 457,000 yen. Both had risen by their daily limits on Monday.

Shares of midsize construction and real estate firms jumped after leasing giant Orix Corp invested in struggling condominium developer Joint Corp , sparking speculation of similar deals in the sector.

Condominium developer Land Co surged 14 percent to 16,260 yen and housing sales firm Touei Housing Corp shot up 16 percent to 232 yen. General contractor Azel Corp soared 34.1 percent to 59 yen.

Shares of Orix shed 4.9 percent to 13,030 yen, while Joint climbed 26.2 percent to 241 yen.

Hitachi Construction Machinery and ferronickel producer Pacific Metals gained after they were chosen to join the benchmark index in a regular reshuffle. [ID:nT264856]

Shares of Hitachi Construction climbed 3 percent to 2,395 yen, while Pacific Metals added 2.5 percent to 670 yen.

Trade was light on the Tokyo exchange's first section, with 1.79 billion shares changing hands, compared with last week's daily average of 1.91 billion.

Declining stocks outpaced advancing ones by a ratio of more than 4 to 1. (Additional reporting by Taiga Uranaka; Editing by Edwina Gibbs)