TOKYO (Reuters) - Japan's Nikkei average fell 5.3 percent and hit a three-week low on Thursday as worries about a deepening global recession hit hard, with exporters such as Canon Inc (7751.T: Quote, Profile, Research, Stock Buzz) down on a firmer yen amid fears about the U.S. auto industry. Mitsubishi UFJ Financial Group (8306.T: Quote, Profile, Research, Stock Buzz) and other large banks fell after shares in Citigroup Inc (C.N: Quote, Profile, Research, Stock Buzz) plunged 23 percent to a 13-year low as investors questioned the survival prospects of the U.S. banking giant. "Shares in all the U.S. financials are really low, which gives me a very bad feeling and makes me wonder what might lie ahead," said Takashi Ushio, head of the investment strategy division at Marusan Securities. "Citigroup shares closed at the $6-level. That's the kind of level at which almost anything could happen." Concern that the deteriorating global economy is biting into Japan's export-dependent economy intensified after the nation's exports logged their biggest annual decline in seven years in October, pushing the trade balance into deficit. Investors were also concerned about demand from the United States after consumer prices in the world's biggest economy fell at the sharpest rate on record in October. Amid the growing gloom, some of the biggest worry centered on U.S. automakers such as General Motors Corp (GM.N: Quote, Profile, Research, Stock Buzz) as prospects for an auto bailout dimmed. "A failure by GM or any of the Big Three would hit U.S. consumption and drag its economy down still more," said Ushio. The benchmark Nikkei .N225 was down 445.88 points at 7,827.34 after earlier falling as low as 7,812.66, its lowest since October 29, the day after the Nikkei hit a 26-year low. The broader Topix .TOPX shed 4.8 percent to 788.02 yen. Risk aversion kept the yen firm and exporters weak as a result. A strong yen eats into Japanese profits when repatriated. Hit especially hard were high-tech exporters such as Kyocera Corp (6971.T: Quote, Profile, Research, Stock Buzz), which slipped 5.9 percent to 4,650 yen, and TDK Corp 6762.T>, which fell 9.4 percent to 2,835 yen. Canon fell 4.8 percent to 2,670 yen, Panasonic Corp (6752.T: Quote, Profile, Research, Stock Buzz) lost 6.9 percent to 1,361 yen and Sony Corp (6758.T: Quote, Profile, Research, Stock Buzz) fell 4.9 percent to 1,855 yen. Top lender Mitsubishi UFJ Financial Group shed 6.9 percent to 477 yen, while No. 3 bank Sumitomo Mitsui Financial Group (8316.T: Quote, Profile, Research, Stock Buzz) fell 10.3 percent to 281,800 yen. Second-ranked Mizuho Financial Group (8411.T: Quote, Profile, Research, Stock Buzz) lost 6.5 percent to 198,800 yen. (Reporting by Elaine Lies; Editing by Chris Gallagher)

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