* Germany's Infineon hurts chip-related stocks
* Shippers lose ground
By Ayai Tomisawa
TOKYO, March 28 (Reuters) - Japan's Nikkei tumbled on Thursday as sliding U.S. bond yields fed fears about a U.S. economic slowdown and a deepening downturn globally, putting a dent on cyclical stocks such as exporters.
The Nikkei share average dropped 1.5 percent to 21,049.94 at the midday break, after falling to as low as 20,974.19 earlier.
Benchmark 10-year Treasury yields fell to 15-month lows on Wednesday, keeping the yield curve inverted in a signal of a future U.S. recession.
On Wednesday, New Zealand's central bank stunned markets with a sharp shift to a dovish stance, while the European Central Bank delayed a planned increase in rates in the face of rising global growth risks.
The economic gloom saw Germany sell 10-year debt with a negative yield for the first time since the autumn of 2016.
"Investors are increasingly becoming risk-averse and shifting to safe-haven defensive shares from cyclical stocks," said Nobuhiko Kuramochi, a strategist at Mizuho Securities.
But he said that when the index falls below its psychologically important 21,000-line, selling tends to ease.
Exporters were sold off, as the dollar slipped 0.15 percent to 110.34 yen, although it managed to stay clear of a six-week trough of 109.70 plumbed on Monday.
Tokyo Electron slid 2.4 percent, Subaru Corp tumbled 3.8 percent and Hitachi Construction Machinery shed 2 percent.
Renesas Electronics Corp and Rohm Co stumbled more than 5 percent after German chipmaker Infineon cut its 2019 revenue forecast on Wednesday for the second time, which hurt U.S. chip shares overnight.
The Philadelphia SE Semiconductor index dropped 1.5 percent.
Shippers, which are sensitive to global demand, languished. Mitsui OSK Lines dropped 3.3 percent and Kawasaki Kisen tumbled 4.6 percent.
Elsewhere, Gunma Bank dived 7.9 percent after it cut its net profit outlook for the year ending March to 23.1 billion yen from 28.5 billion yen.
The broader Topix dropped 1.7 percent to 1,581.53. Declining issues outnumbered advancing ones 1,960 to 155. (Editing by Shri Navaratnam)