* Nikkei has fallen 5.4 pct for week, biggest weekly drop since Feb
* Insurance sector falls 3.4 pct after soaring 8.6 pct in Sept
* Nikkei volatility eases after spiking on Thurs
* Nikkei’s near term support seen at 22,187 - analyst
By Ayai Tomisawa
TOKYO, Oct 12 (Reuters) - Japan’s Nikkei fell on Friday morning as investors maintained their risk aversion after Wall Street extended its slide overnight, dragging down recent winners such as insurers.
The Nikkei share average was down 0.5 percent to 22,488.86 at the midday break after suffering its biggest daily fall since March on Thursday.
It has fallen 5.4 percent so far this week and is on track to post its biggest weekly drop since February.
Worries over rising U.S. interest rates have dragged on, compounding investors’ fears of the harm that the U.S.-China trade war could do to the global economy.
“This is like déjà vu as the current sell-off reminds the market of selling in February when the volatility index spiked on sudden rises in U.S. yields,” said Katsuhiko Nakamura, senior technical analyst at Mizuho Securities.
The Nikkei Volatility Index, a widely followed barometer of expected near-term volatility in the Nikkei, eased to 25.91 on Friday, a level not seen since March, after jumping from 18.36 to 27.52 on Thursday.
Nakamura said that the Nikkei should be supported at 22,187, 5 percent below its 25-day moving average where the market is considered oversold in a short period of time.
The insurance sector was the biggest loser on the board, fall 3.4 percent after rising 8.6 percent last month.
Traders said global investors are seen taking profits, while Thursday’s sharp selling in such U.S. insurers as Prudential Financial and American International Group is also dampening the mood in the sector.
Dai-ichi Life Holdings dropped 4.6 percent to 2,245.5 yen after rising to a January-high of 2467.5 yen last week. Sompo Holdings, which hit a record high last month, fell 4.7 percent.
Other recent gainers such as the defensive land transport sector soared 6.5 percent last month, fell 1.7 percent. East Japan Railway Co declined 2.0 percent and West Japan Railway Co slid 2.8 percent.
Convenience store operator Lawson Inc stumbled 6.9 percent after the company posted an 11.5 percent drop in its operating profit for the March-August period as investment costs at its domestic convenience store business weighed.
The broader Topix dropped 0.6 percent to 1,692.38. (Reporting by Ayai Tomisawa, editing by Eric Meijer)