* Market sensitive about prospect of BOJ’s exit from ultra easy policy - analyst

* Automakers fall on potential impact of higher costs on consumers

* Nikkei drops 3.2 pct this week

TOKYO, March 2 (Reuters) - Japanese stocks fell to a 2-1/2-week low on Friday, with steelmakers and automakers taking a battering after President Donald Trump said the United States would impose import tariffs on steel and aluminum, sending the short-sell ratio to a record high.

The ratio of shares sold short hit a record high of 48.8 percent.

Investors also got a jolt on comments from Bank of Japan Governor Haruhiko Kuroda that the central bank will consider an exit from easy policy if its inflation target is achieved during fiscal 2019.

The Nikkei ended 2.5 percent lower to 21,181.64 points, the lowest closing level since Feb. 14. The index dropped 3.2 percent this week.

The broader Topix dropped 1.8 percent to 1,708.34, with all of its 33 subsectors falling.

“The market has been very sensitive about BOJ’s exit from ultra easy policy,” said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities. “Until now, the BOJ did not comment on exiting, but since it was reported that he commented on exiting, the market was startled.”

Shares of steel and aluminum companies were hammered, after Trump said the United States would impose tariffs of 25 percent on steel imports and 10 percent on imported aluminum, to be formally announced next week.

“Three bad things have hit the Japanese market,” said Toru Ibayashi, executive director of Wealth Management at UBS Securities Japan, referring to a stronger yen, worries about corporate earnings next fiscal year and potential damage to the steel and auto sectors. “These are serving as a headwind to Japanese stocks which are driving away foreign investors.”

He sees downside support for the Nikkei at 20,000.

“It may not fall to this level now. The index may rebound once at 21,000, but I think it will fall to 20,000 at some point this year,” Ibayashi said.

Nippon Steel & Sumitomo Metal Corp dropped 3.8 percent, JFE Holdings fell 2.8 percent and Kobe Steel declined 2.7 percent.

Automakers, big consumers of steel and aluminum, were sold off on worries over the potentially higher costs on consumers.

“The first impression from the news was very negative,” said Takuya Takahashi, a strategist at Daiwa Securities. “Automakers will have to bear the cost, and they may also have to raise prices while auto sales are already sluggish. This isn’t looking good to the auto sector.”

Honda Motor Co tumbled 3.8 percent, Toyota Motor Corp dropped 2.4 percent, Subaru Corp shed 2.1 percent, Nissan Motor Co declined 1.4 percent and Mazda Motor Corp tanked 2.9 percent. (Reporting by Ayai Tomisawa; Editing by Shri Navaratnam and Gopakumar Warrier)