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)