* Eyes on Friday's U.S. jobs data, Fed clues - analyst * Large caps mixed, exporters lower * Fast Retailing drops on weaker-than-expected Dec sales * Mori Seiki soars on CLSA's upgrade By Ayai Tomisawa TOKYO, Jan 7 (Reuters) - Japan's Nikkei share average dropped on Tuesday morning after economic data showing a slowdown in growth in the U.S. services sector made investors wary of taking on risk. The Nikkei fell 0.6 percent to 15,807.86 in choppy mid-morning trade. After opening lower, it briefly flirted with positive territory. On Monday, the index ended 2.4 percent lower. Data from the Institute for Supply Management showed the pace of growth in the U.S. services sector slowed for a second straight month in December with business activity expanding at a lower rate and new orders contracting. Analysts said investors' eyes will be on Friday's U.S. nonfarm payrolls data, which will give further clues as to how fast the Federal Reserve will unwind its stimulus programme. "When the market is sensitive about how well the U.S. economy is doing, each economic data can create volatility in the market," said Hikaru Sato, a senior technical analyst at Daiwa Securities. "Until Friday, it will be difficult to draw new money into the market, but the weak ISM data is not going to be the reason to sell aggressively." The Topix dropped 0.1 percent to 1,291.39. Large cap stocks, which tumbled on Monday on profit-taking, were mixed. Fast Retailing Co dropped 0.7 percent and was the most traded stock by turnover after its same-store sales at its Uniqlo clothing chain in December disappointed the market. The same-store sales in December rose 1.1 percent from a year earlier as the colder weather pushed up sales of winter clothing, but it was worse than what the market expected, traders said. For other large cap stocks, Fanuc Corp slid 0.8 percent, while KDDI Corp rose 1.8 percent. Exporters were weaker as the dollar traded at 104.18 yen , having fallen as far as 103.91, a low not seen since Dec. 23. It continued to pull back from a five-year peak of 105.45 set last week. Honda Motor Co and Tokyo Electron Ltd both fell 0.7 percent. DMG Mori Seiki Co bucked the weakness, rising as much as 4.4 percent to a 5-1/2-year high after CLSA hiked its rating to 'high-conviction buy' from 'outperform', citing a recovery in machine-tool demand and a possibility that it will raise its earnings forecast.