* Topix 33 subsectors in negative territory * All eyes on U.S. payroll data * Market should brace for higher U.S. yield if data sharply exceed forecasts - analyst By Ayai Tomisawa TOKYO, Jan 9 (Reuters) - Japan's Nikkei share average fell on Thursday morning after rising sharply on the previous day, as investors stayed risk averse before the release of U.S. nonfarm payroll data on Friday. The Nikkei dropped 1.3 percent to 15,915.27 in mid-morning trade after soaring 1.9 percent on Wednesday. The broader Topix index, which jumped 1.8 percent to end Wednesday at its highest since July 2008, shed 0.7 percent to 1,297.43. All of its 33 subsectors were in negative territory. "Investors stayed risk-off before the major event (Friday's jobs data), but in the mid-to-long term, Japanese shares are on the rise," said Takatoshi Itoshima, chief portfolio manager at Commons Asset Management. Financials, which were bought on the previous day by what traders said seemed like foreign pension funds and other foreign funds, lost ground on profit-taking. Mizuho Financial Group dropped 1.7 percent and was the second-most traded stock by turnover, while Mitsubishi UFJ Financial Group fell 1.5 percent. The JPX-Nikkei Index 400, which started trading on Monday, dropped 0.8 percent to 11,709.84. All eyes are on Friday's nonfarm payroll report, which will give further clues on how well the U.S. economy is recovering and how fast the Federal Reserve will scale back its stimulus program. Economists polled by Reuters expect 196,000 jobs to have been added to the U.S. economy in December. "If it exceeds the forecast sharply, say, way higher than 200,000 jobs, we need to watch out for a possible rise in the U.S. long-term interest rate," said Nobuhiko Kuramochi, a strategist at Mizuho Securities. Other recent gainers also dropped, with Nintendo Co shedding 3.3 percent after jumping 11 percent as China temporarily lifted a 14-year ban on selling video game consoles, while infrastructure-related stock Mitsubishi Heavy Industries Ltd slid 1.0 percent. However, Sony Corp bucked the weakness, rising 2.7 percent, with traders saying investors pushed the stock price to reflect the price of Sony's American depository receipts.