Nikkei drops over 4 pct to 2-mth low on Greece woes

                                
 * Exporters hurt by stronger yen worry as euro under pressure
                                
 * Fast Retailing sinks on weak April sales data
                                
 * Nikkei sees support around 10,300, 200-day MA -analysts
                                
 By Aiko Hayashi and Elaine Lies
                                
 TOKYO, May 7 (Reuters) - Japan's Nikkei average fell more
than 4 percent to a two-month low on Friday, with exporters such
as Canon Inc <7751.T> battered after U.S. stocks plunged as much
as 9 percent as a wave of selling triggered by Europe's debt
crisis gathered speed.
                                
 U.S. stock exchange officials were investigating whether
erroneous trades caused a sudden slump in share prices that wiped
nearly $1 trillion off U.S. equity values at the peak of the
sell-off before prices clawed back some of their losses.
[ID:nN06234011] [ID:nN06139251]
                                
 Fast Retailing <9983.T> fell about 5 percent, the top drag on
the Nikkei 225, after the company said that same-store sales at
its Uniqlo casual-clothing chain fell 12.4 percent in April from
a year earlier as cool weather hurt sales of spring items.
                                
 "The Greece debt crisis is reminding investors of what
happened after Lehman Brothers' collapse. A failure by one
financial institution ended up triggering a ripple effect on the
global economy," said Kazuhiro Takahashi, general manager at
Daiwa Securities Capital Markets.
                                
 The benchmark Nikkei <.N225> fell as much as 4.1 percent at
one stage to 10,257.32, its lowest since early March and below
the 200-day moving average of around 10,300. By the midday break,
it was down 3.7 percent at 10,295.63.
                                
 The broader Topix <.TOPX> shed 3.3 percent to 925.53.
                                
 Since investors returned to the Japanese market following a
                                
string of holidays on May 3-5, the Nikkei has lost about 7
percent.
                                
 Partly because some erroneous trades were suspected to be
behind the plunge on Wall Street, the Nikkei will for now likely
find support around its 200-day moving average, market players
said.
                                
 "People were expecting an adjustment anyway but I think most
of them thought it would stop around 10,600. The big issue for
today is whether it can end above the 200-day moving average or
not," said Kenichi Hirano, operating officer at Tachibana
Securities.
                                
 "When the economy's on a recovery track, as it is right now,
it's hard to imagine the Nikkei staying much below the 200-day
moving average for long. It just isn't logical."
                                
 Investors will now be watching U.S. jobs data as well as a
euro zone summit on the Greek crisis later in the day.
  [ID:nN06128710] [ID:nLDE62N12L]
                                
 EXPORTERS DRAG
                                
 In the United States on Thursday, the S&P 500 <.SPX> dived 9
percent at one stage before ending down 3.2 percent. [.N]
                                
 The European Central Bank did not discuss the outright
purchase of European sovereign debt at a meeting on Thursday but
instead gave verbal support to Greece's savings plan,
disappointing some investors. [ID:nLDE6450H7]
                                
 Worries about a stronger yen also hurt shares of exporters as
 the stronger currency will curb Japanese exporters' profits when
repatriated.
                                
 The euro was around 116 yen <EURJPY=> in Asia trade, after
shedding around 10 yen at one point the previous day. [FRX/]
                                
 Digital camera maker Canon lost 4.2 percent to 4,045 yen and
chip-tester maker Advantest Corp <6857.T> shed 5.2 percent to
2,218 yen. Kyocera Corp <6971.T> dropped 4.2 percent to 8,720
yen.
                                
 Automaker Honda Motor Co <7267.T> skidded 4.1 percent to
2,984 yen.
                                
 Fast Retailing sank 5.1 percent to 13,160 yen.
                                
 Nintendo Co <7974.OS> tumbled 10.2 percent to 27,520 yen
after the game console maker forecast a second straight year of
smaller profits as sales of its Wii console slow, after posting
its first quarterly profit growth in more than a year.
[ID:nTOE64505P]
                                
 Among rare bright spots, Mitsui Mining & Smelting <5706.T>, a
leading non-ferrous metals manufacturer, rose 1.6 percent to 255
yen after the company estimated a 33 percent rise in net profit
to 18.5 billion yen for the financial year ending in March 2011,
beating consensus of 10.5 billion yen from nine analysts polled
by Thomson Reuters I/B/E/S.
  (Editing by Joseph Radford)