* Nikkei trims declines as investors buy on dips
* Automakers, machinery cos sensitive to global demand fall
By Ayai Tomisawa
TOKYO, Dec 5 (Reuters) - Japan's Nikkei slipped to a 1-1/2-week low on Wednesday after a sell-off on Wall Street and falling U.S. bond yields revived worries about the global economy and corporate earnings growth.
Financials, auto and machinery sectors took a beating, though bargain-hunting by investors helped the market recoup some of its earlier losses, traders said.
The Nikkei share average .N225 dropped 0.5 percent to 21,919.33, the lowest close since Nov. 26.
Wall Street tumbled more than 3 percent on Tuesday, led lower by bank and industrial shares, as the U.S. bond market sent unsettling signs about economic growth.
A prominent Federal Reserve official's comments about the path of interest rate hikes added to the uncertainty for investors, as did setbacks for Britain's plans to leave the European Union. financial firms, which invest in foreign bonds, tumbled and underperformed as the U.S. 10-year Treasury yield US10YT=RR shed nearly 8 basis points, to 2.915 percent, after hitting its lowest level since Sept. 7.
The Nikkei has been volatile this week, falling on Tuesday after a rally the previous day following a temporary halt to further tariffs between the United States and China. However, doubts over whether a durable trade deal can be struck between the economic heavyweights have since led to a retreat in riskier assets.
"The effectiveness of the 'medicine' faded more quickly than we had expected," said Yoshihiro Okumura, general manager at Chibagin Asset Management. "Right now, worries about a slowdown in the global economy are outweighing investors' optimism."
The broader Topix .TOPX dropped 0.5 percent to 1,640.49, with insurers and banks underperforming.
Dai-ichi Life 8750.T tumbled 3.2 percent, T&D Holdings 8795.T shed 2.2 percent and MS&AD Insurance 8725.T declined 1.4 percent. Mitsubishi UFJ Financial Group 8306.T dropped 0.9 percent and Chiba Bank 8331.T stumbled 4.4 percent.
Automakers and machinery makers, which are sensitive to global demand, were also battered. Honda Motor 7267.T stumbled 2.4 percent, Subaru Corp 7270.T shed 0.9 percent and Fanuc Corp 6954.T slipped 3.4 percent. Semiconductor-related shares weren't spared the investor angst either, with Advantest Corp 6857.T tumbling 4.6 percent and Sumco Corp 3436.T falling 3.4 percent.
Declining issues outnumbered advancing ones by 1,469 to 590. (Editing by Jacqueline Wong)
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