Nikkei drops 0.5 pct, exporters retreat on yen surge

TOKYO, July 9 (Reuters) - Japan's Nikkei average fell 0.5 percent on Thursday, with exporters such as Canon Inc (7751.T) retreating as the yen surged to 5-month highs against the dollar the previous day on growing concerns about the health of the global economy.

The Nikkei's decline was cushioned, however, after U.S. aluminium giant Alcoa Inc (AA.N) reported a smaller-than-expected loss after the market close on Wednesday, giving a positive tone to the start of the closely-watched U.S. earnings season.

The benchmark Nikkei .N225 fell 49.67 points to 9,371.08 after hitting 9,307.81, its lowest level since late May.

The broader Topix declined 1 percent to 879.75. (Reporting by Shinichi Saoshiro)