* Nikkei has risen 2.7 pct for the week so far
* Financial firms lose ground on falling U.S. yields
By Ayai Tomisawa
TOKYO, Feb 15 (Reuters) - Japan’s Nikkei fell on Friday as bleak U.S. retail sales data dampened investor risk appetite and dragged down the broader market, with exporters and financial firms underperforming.
The Nikkei share average dropped 1.2 percent to 20,886.27 at the midday break, retreating from a two-month high of 21,235.62 hit on Thursday. For the week, the index has risen 2.7 percent so far. “The Japanese market enjoyed a short-term rally but the upside seems limited as there are still concerns about global slowdown in the mid to long term,” said Shogo Maekawa, a global market strategist at JPMorgan Asset Management.
Overall sentiment was hurt by a report from the U.S. Commerce Department showing retail sales in December suffered their biggest drop in more than nine years, stoking fears of an economic slowdown.
Exporters were broadly lower, after the yen rose 0.1 percent against the dollar to 110.33.
Honda Motor Co shed 2 percent, Mazda Motor declined 1.9 percent, Panasonic Corp dropped 1.3 percent and Nintendo Co fell 0.9 percent.
Financial firms, which hunt for higher yields such as foreign bonds, were also pressured after U.S. Treasury yields fell on Thursday on weak U.S. retail sales.
Dai-ichi Life Holdings tumbled 4.3 percent, T&D Holdings dropped 3 percent and Mitsubishi UFJ Financial Group slipped 1.5 percent.
Japan Display Inc stumbled as much as 9.5 percent after the company said it expects to post its fifth straight year of net losses, with a late shift to organic light-emitting diode (OLED) screens and slowing iPhone sales costing it orders from Apple Inc, its biggest client.
The broader Topix dropped 0.9 percent to 1,575.16. Declining issues outnumbered advancing ones 1,499 to 546. (Editing by Jacqueline Wong)