* Nikkei drops 0.3 pct, Topix down 0.3 pct * U.S. fiscal standoff continues to weigh on sentiment * Mid-term outlook for Nikkei remain strong - analysts By Tomo Uetake TOKYO, Oct 8 (Reuters) - Japan's Nikkei share average declined for the fifth straight day to a five-week low on Tuesday morning, with a lack of progress in ending the U.S. government shutdown or the debt-ceiling standoff kept investors on edge. The benchmark Nikkei was down 0.3 percent at 13,808.69, its lowest level since Sept. 3, in midmorning trade, after shedding 4.4 percent in the past four sessions. The index is still up 33 percent this year. "The cause of the fall is crystal clear, it's the U.S. congress standoff, which is completely external to Japan. Nobody thinks the Tokyo market will go into a freefall situation," said Kenichi Hirano, strategist at Tachibana Securities. "Its longer- term outlook is still strong." There were signs of stepped-up efforts in Washington on Monday to resolve the fiscal crisis, with President Barack Obama saying he would accept a short-term increase in the country's borrowing authority in order to avoid a crisis. But seven days into a government shutdown and only 10 days from a critical deadline to raise the U.S. debt ceiling, nothing amounting to a breakthrough was in sight. "Once the government shutdown ends and the debt ceiling gets increased and the earnings season gets into full swing, the Nikkei will resume its rally," said Shun Maruyama, chief Japan equity strategist at BNP Paribas. "Except that some hedge funds are trimming their positions, investors have largely moved to the sidelines. For them, there's not much reason to trade today." The broader Topix shed 0.3 percent to 1,144.35 in relatively light trade, with volume at 38.5 percent of its full daily average for the past 90 trading days. E-commerce related shares fell sharply after Yahoo Japan Corp said on Monday it would eliminate some charges on sellers on its site, sparking concerns of tougher competition. Yahoo shares fell 10.3 percent to become the eighth-most traded stock by turnover on the main board, while rival Rakuten Inc plunged 13.8 percent. Investors are also focusing on domestic corporate earnings reports. FamilyMart Co Ltd bucked the overall weakness and gained 1.1 percent after the convenience store operator said on Monday that its recurring profits in the March-August period rose 3.1 percent on the year to hit a record high.