Nikkei falls to 2-1/2 week low on caution over Greece, Fed
* Japanese market taking breather after rally - analyst * Investors cautious ahead of Fed meeting * Concerns over Greece remains drag on market By Ayai Tomisawa TOKYO, June 9 (Reuters) - Japan's Nikkei share average slid to a 2-1/2-week low on Tuesday morning pressured by worries about Greece's precarious financial position, while the prospect of a September lift-off for U.S. interest rates also sapped confidence. The Nikkei 225 dropped 0.7 percent to 20,304.99 in mid-morning trade after falling to a low of 20,277.43, the weakest level since May 22. Market sentiment was bruised by speculation of a U.S. rate increase as early as September and persistent caution over Greece where debt talks showed no signs of producing a breakthrough. "Investors are looking to trim positions before the widely focused FOMC meeting," said Jun Yunoki, a strategist at Nomura Securities, noting the 5 percent rally over the past month allowed for a breather. He expects the market to start pushing higher after domestic events, such as shareholders' meetings, are completed later this month. Next week, the U.S. Federal Reserve's Federal Open Market Committee (FOMC) holds a two-day meeting on interest rates. The event will be closely monitored for any hints on policy track after Friday's solid U.S. jobs data for May bolstered the case for a rate increase in September. Meanwhile, the Greek government said it was ready to negotiate a settlement acceptable to both sides by the end of this month, just three days after Prime Minister Alexis Tsipras told his parliament the latest proposal from the EU and IMF was "absurd". Yet there was no new proposal from Athens that its creditors could agree to, an EU official said. <ID:nL5N0YU2T7> Exporters were down, with Honda Motor Co falling 1.0 percent, Fuji Heavy Industries shedding 1.7 percent and Advantest Corp off 2.3 percent. Bucking the broad market, West Japan Railway soared 2.5 percent after Barclays Capital raised its rating to 'overweight' from 'equal-weight', citing the company's likely higher profits followed by higher shareholder returns in the next few years. The broader Topix dropped 0.7 percent to 1,651.20 and the JPX-Nikkei Index 400 shed 0.7 percent to 14,913.23.
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