Nikkei retreats from 10-mth highs, eyes Fed

* Nikkei tracks U.S. stocks lower, profit-taking emerges

* Gains above 11,000 yen tough without strong results, data

* Sapporo Holdings jumps on report it to take Pokka stake

TOKYO, Aug 12 (Reuters) - Japan's Nikkei average pulled back from 10-month highs on Wednesday, as concerns over a U.S. economic recovery grew after an unexpectedly large drop in wholesale inventories and negative comments about the banking sector from a prominent analyst.

Analysts said investors were locking in profits ahead of the end of a Federal Reserve board meeting and issuance of its policy statement, with attention on whether it unwinds some of the quantitative easing policies currently in place.

Exporters such as Canon Inc (7751.T) fell but Sapporo Holdings (2501.T) gained on a report it will buy 20 percent stake in drinks maker Pokka Corporation as part of a three-way tie-up with Meiji Holdings (2269.T).

"There's some concern that the Nikkei has been overbought, and that put together with inability to read what the Fed might do is leading to profit-taking," said Takashi Ushio, head of the investment strategy division at Marusan Securities.

The benchmark Nikkei .N225 shed 0.6 percent or 62.45 points to 10,520.09 after rising to a 10-month high of 10,587.36 on Tuesday, while the broader Topix fell 0.9 percent to 964.41.

"I wouldn't go so far yet as to call what's happening now an adjustment, but for the Nikkei to rise past 11,000 we need to see proof of quite a sharp recovery in earnings," said Ushio.

Japanese wholesale prices fell a record 8.5 percent in July from a year earlier, highlighting growing deflationary pressure in the economy and limiting the Bank of Japan's scope for ending its unorthodox policy measures, but analysts said there was little impact from this on the Nikkei.

Banks lost some ground. Their U.S. peers fell after Rochdale Securities analyst Richard Bove painted a gloomy outlook for the U.S. banking industry, saying he expected a short-term pull-back in their stock prices and sending the S&P 500 financial sector .GSPF down 3.5 percent.

Sumitomo Mitsui Financial Group (8316.T), Japan's No. 3 bank, lost 1.4 percent to 4,100 yen, Mitsubishi UFJ Financial Group (8306.T) lost 1 percent to 604 yen and Mizuho Financial Group (8411.T) shed 1.7 percent to 234 yen.

Canon slipped 0.9 percent to 3,450 yen, Sony Corp (6758.T) fell 2 percent to 2,715 yen, and Honda Motor Co (7267.T) lost 1.3 percent to 3,080 yen.

Sompo Japan Insurance (8755.T) shed 4.3 percent to 653 yen after the non-life insurer on Tuesday announced a first quarter net loss of 3.8 billion yen ($39.6 million), in contrast to strong profits posted by other major nonlife insurers. (Reporting by Elaine Lies; Editing by Edwina Gibbs)