* Exporters hurt by yen; Sony falls after earnings
* CIT, Citi news spark worry about financials - analysts
* Consumer lenders soar on news govt may ease lending rules
By Aiko Hayashi
TOKYO, Nov 2 (Reuters) - The Nikkei average slid 3 percent on Monday to mark its lowest point in three weeks, with exporters hit by a stronger yen and after weak U.S. consumer spending data sparked a sell-off on Wall street.
Bank shares such as Mitsubishi UFJ Financial Group fell after accounting expert Robert Willens said Citigroup was likely to have a $10 billion fourth-quarter charge on its deferred tax assets, sparking worries about the sector.
Analysts also cited CIT Group's bankruptcy filing on Sunday as further negative news for the market. CIT is a U.S. lender to hundreds of thousands of small and medium-sized businesses.
"Economic indicators are beginning to show uncertainty about the future, despite solid corporate earnings results so far," said Yutaka Miura, a senior technical analyst at Mizuho Securities.
"We have a bunch of news including CIT that is making investors nervous about the outlook for the economy as well as earnings going forward."
In moderate trade, the benchmark Nikkei shed 2.7 percent to 9,762.66 by the midday break, after falling as much as 2.98 percent to 9,736.14, its lowest since Oct. 7.
The broader Topix lost 2.1 percent to 875.66.
The S&P lost 2.8 percent on Friday as the fragility of the U.S. economic recovery was highlighted by economic reports that showed U.S. consumers cut spending in September and consumer sentiment turned gloomier this month.
But consumer lenders including Aiful Corp soared after the Nikkei business daily said on Sunday that Japan would consider reversing its tightening of regulations on moneylenders to help self-employed business owners following the financial crisis.
EXPORTERS HIT, CONSUMER LENDERS JUMP
Among exporters, Kyocera Corp sank 4.1 percent to 7,430 yen and Canon Inc lost 4 percent to 3,390 yen. Honda Motor Co slid 2.8 percent to 2,800 yen.
The yen rose to two-week highs against the dollar around 89.20 yen in early Asia trade. Investors fret about a stronger yen as it eats into exporters' profits when they are repatriated.
Sony Corp dropped 5.8 percent to 2,625 yen after posting on Friday its fourth consecutive quarterly loss in July-September, hit by sluggish cellphone sales and as it cut prices of its PlayStation 3 game console.
Bank shares fell, with Japan's top bank Mitsubishi UFJ falling 2 percent to 485 yen and Mizuho Financial Group slipping 1.6 percent to 180 yen.
CIT's bankruptcy, one of the largest in U.S. corporate history, had been widely expected for months, but it could further constrict credit and weigh on the fragile U.S. economy.
But Japanese consumer lender Aiful soared 21.1 percent to 161 yen, while Takefuji surged 23.1 percent to 427 yen. Credit Saison Co Ltd jumped 19.1 percent to 1,241 yen.
"Easing of regulations will be a good news in the short term," said Takahiko Murai, general manager of equities at Nozomi Securities.
"But the situation surrounding the industry remains that those seeking funds are small to mid-sized companies who may be at risk of going bankrupt, not large corporations."
Sanyo Electric Co gained 2.2 percent to 233 yen after the Nikkei business daily said the company has agreed with PSA Peugeot Citroen to supply nickel-metal hydride batteries for the French carmaker's diesel-electric hybrid cars.
The Nikkei also said Panasonic Corp will launch its tender offer for shares of smaller rival Sanyo as early as Thursday, after that deal won approval from Chinese regulators.
Some 929 million shares changed hands on the Tokyo exchange's first section, roughly in line with last week's morning average.
Declining stocks outnumbered advancing ones by more than 4 to 1. (Editing by Chris Gallagher)