* Nikkei briefly hits lowest point since Nov. 21 * Financial fear weighs on banks, but not panic situation * Sony may announce restructuring details soon, report says * Techs extend losses, but Elpida up on possible merger talks (Adds stocks, details) By Elaine Lies TOKYO, Jan 21 (Reuters) - Japan's Nikkei average slipped 1.9 percent on Wednesday after earlier hitting a two-month low on rekindled fear about the global financial sector that sent banks such as Sumitomo Mitsui Financial Group (8316.T: Quote, Profile, Research, Stock Buzz) sliding. Tech shares extended losses and exporters slipped as the dollar remained below 90 yen, while Sony Corp (6758.T: Quote, Profile, Research, Stock Buzz) fell 2.7 percent after a newspaper said it is preparing to announce on Wednesday or Thursday details of its December restructuring plan, including where job cuts will fall. [ID:nT334019] But shares of Elpida Memory (6665.T: Quote, Profile, Research, Stock Buzz) jumped over 5 percent after the company said it was in talks with Taiwanese DRAM makers including Powerchip (5346.TWO: Quote, Profile, Research, Stock Buzz), ProMOS Technologies (5387.TWO: Quote, Profile, Research, Stock Buzz) and Rexchip, on a possible merger as well as other options. [ID:nT331174] "There's no question that worry about the financial system has revived, but it's different from last year -- there's no panic," said Takashi Ushio, head of the investment strategy division at Marusan Securities. "There's now a safety net in place and people are much more determined to keep things from falling apart." Disappointment with U.S. President Barack Obama's inauguration speech, which laid out few new details on how his administration will tackle the banking crisis and flagging economy, helped push stocks lower. "People still have expectations for his economic policies, but we know nothing concrete about them, so the market has no choice but to focus on the real economy and earnings," said Yutaka Miura, chief technical analyst at Shinko Securities. But other market players said hopes that helped power a global stock rally around the New Year had been unrealistic. "As for Obama, perhaps you can say his impact has worn off, but soon he'll actually start carrying out his policies and we'll start seeing a reaction to what he really does," said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Securities. The benchmark Nikkei .N225 shed 155.94 points to 7,909.85 after earlier falling to 7,829.30, its lowest since Nov. 21. It has so far lost 10.7 percent this year compared with a 42 percent loss for all of 2008. The broader Topix .TOPX lost 1.9 percent to 789.80. BANKS BATTERED, TECH TROUBLES Banks were hit after Royal Bank of Scotland (RBS.L: Quote, Profile, Research, Stock Buzz) unveiled the biggest loss in British corporate history on Monday, with U.S. investors spooked further by State Street Corp (STT.N: Quote, Profile, Research, Stock Buzz), the world's largest institutional money manager, reporting on Tuesday a $6.3 billion unrealised loss on its investment portfolio and lowering its outlook. [ID:nN20435413] Sumitomo Mitsui Financial Group, Japan's third-biggest bank, shed 5.7 percent to 3,330 yen. Top bank Mitsubishi UFJ Financial Group (8306.T: Quote, Profile, Research, Stock Buzz) lost 3.8 percent to 483 yen and second-ranked Mizuho Financial Group (8411.T: Quote, Profile, Research, Stock Buzz) fell 2.2 percent to 223 yen. The banking subindex lost 2.7 percent but was off earlier lows. Tech shares extended recent losses on falling demand amid the poor global economy, with Kyocera Corp (6971.T: Quote, Profile, Research, Stock Buzz) down 2.6 percent at 5,940 yen and Advantest (6857.T: Quote, Profile, Research, Stock Buzz) 2.8 percent lower at 1,184 yen after their U.S. peers fell on worry about earnings at IBM (IBM.N: Quote, Profile, Research, Stock Buzz), though those were ultimately better than forecast. Elpida, however, surged 5.6 percent to 563 yen. "Things have been very tough for Elpida and similar companies, so some kind of restructuring is necessary and it is good for companies to synergise like this," said Yamagishi at Mitsubishi UFJ Securities. Sony fell 2.7 percent to 1,970 yen after the report that it will fill out the details of plans announced last month that called for curbing investment, exiting businesses and cutting 16,000 jobs. [ID:nT38839] The dollar edged up 0.2 against the yen after slipping overnight, trading around 89.97 yen , but the fact that it remained below 90 yen sparked selling of exporters. Canon Inc (7751.T: Quote, Profile, Research, Stock Buzz) lost 1.6 percent to 2,740 yen and Honda Motor Co (7267.T: Quote, Profile, Research, Stock Buzz) fell 2.4 percent to 2,080 yen. Toyota Motor Corp (7203.T: Quote, Profile, Research, Stock Buzz), which on Tuesday said that the founder's grandson, Akio Toyoda, would head the firm, lost 4.2 percent to 2,970 yen. [ID:nT339558] Trade picked up on the Tokyo exchange's first section, with 932 million shares changing hands, compared with last week's morning average of 899 million.

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