Nikkei falls ahead of Italian vote, Olympus plunges

* Nomura tumbles nearly 15 percent
* Toyota down more than 1 pct ahead of earnings

By Lisa Twaronite
TOKYO, Nov 8 (Reuters) - The Nikkei share average tumbled
more than 1 percent on Tuesday, with investors fearful about
Europe's debt situation ahead of an Italian parliamentary vote
on budget reforms, and as scandal-hit Olympus plunged
after saying M&A funds were used to cover securities losses.
Italian woes pressured some stocks exposed to the debt-laden
country, with Nomura Holdings Inc tumbling almost 15
percent.
In Rome, Prime Minister Silvio Berlusconi defied huge
pressure to resign as he struggled to hold a crumbling
centre-right coalition together after being forced to accept
intrusive IMF surveillance of his economic reforms.

After the close on Tuesday, Toyota Motor Corp is
set to post a drop in quarterly operating profit, with supply
shortages due to the March earthquake having curbed production.
"Ahead of the Italian vote and Toyota earnings after the
close, it's a hard day to buy shares, so sellers have the upper
hand. There's just a bad feeling in the market today," said
Yutaka Shiraki, a senior strategist at Mitsubishi UFJ Morgan
Stanley Securities.
The Nikkei was down 1.2 percent at 8,659.95 and the
broader Topix index lost 1.6 percent to 738.15.
U.S. stock futures also fell, suggesting investors were
positioning for losses ahead, with S&P 500 e-mini futures down
4.5 points at 1,253.
Olympus slid 29 percent to 734 yen after it admitted for the
first time on Tuesday that controversial acquisitions had been
used to cover up losses on securities investments dating back to
the 1980s, succumbing to weeks of pressure that has battered the
company's share price.
Olympus President Shuichi Takayama blamed Tsuyoshi Kikukawa,
who quit as president and chairman on Oct. 26, Vice-President
Hisashi Mori and auditor Hideo Yamada for the transactions,
adding he would consider criminal complaints against them if
necessary. Mori would be dismissed, the company said.
Nomura fell 14.9 percent to 244 yen and was the heaviest
traded issue by turnover on the main board. Earlier this month,
it estimated its exposure to Europe at $3.55 billion, mostly in
Italian government securities and positions that mature in the
next five months.
Japanese corporate earnings remain in focus with Toyota set
to release results later Tuesday.
Toyota was down 1.6 percent at 2,506 yen, extending morning
losses after it said it would keep its Japanese production
reduced until at least Nov. 18 due to a shortage of parts from
flooded suppliers in Thailand.
A Toyota spokeswoman said lost output from the impact of Thai
floods between Oct. 10 and Nov. 12 would total around 150,000
vehicles globally.