Nikkei hits 8-week low, political uncertainty weighs

TOKYO (Reuters) - Japan's Nikkei average fell 2.1 percent to hit its lowest point in eight weeks on Monday, hurt by growing political uncertainty after news that embattled Prime Minister Taro Aso is set to call a general election for August 30.

But Kirin Holdings Co (2503.T) jumped nearly 8 percent and other brewers rose after Suntory Holdings Ltd said it was considering a merger with Kirin, which would create one of the world's largest beverage and food firms.

Japan's embattled Prime Minister Taro Aso plans to call a general election on August 30, a top ruling party official said on Monday, despite prospects that his long-ruling conservative party is headed for a big defeat.

A fall in other Asian markets .MIAPJ0000PUS and U.S. stock futures also helped Japan's benchmark to soften further, they said.

"The news may have prompted some investors to hold back buying on dips as they expect instability either way. It's hard to imagine a new stable administration that could spark hopes and push up the market," said Mitsushige Akino, chief fund manager at Ichiyoshi investment Management.

The benchmark Nikkei .N225 slid 2.1 percent or 193.12 points in thin trade to 9,094.16, its lowest level since May 18. It is on track for a nine-day slide.

The broader Topix fell 1.6 percent to 858.34.

Caution ahead of upcoming corporate earnings releases and the yen's resilience against the dollar also hurt some exporter shares.

Sony Corp (6758.T) shed 3.1 percent to 2,160 yen and electronics parts maker Kyocera Corp (6971.T) lost 2.8 percent to 6,600 yen.

Investors warily eyed the yen, which rose to a five-month high against the dollar below 91.80 yen on Friday. The currency retreated to near 93.00 yen early on Monday before drifting back to 92.50 yen.

Closely watched earnings releases this week include those of Goldman Sachs (GS.N) and Intel (INTC.O) on Tuesday, JP Morgan Chase (JPM.N) on Thursday and Bank of America (BAC.N) on Friday.

(Reporting by Aiko Hayashi; Editing by Edwina Gibbs)