TOKYO, May 30 (Reuters) - Japan's Nikkei share average tumbled to six-week lows on Wednesday after political turmoil in Italy sparked concerns over the stability of the euro zone, hitting financial and exporter shares in particular.
The Nikkei ended 1.5 percent lower to 22,018.52, after falling to a six-week low of 21,931.65. The Nikkei managed to stay above its 75-day moving average of 21,920.19, which has become the index's immediate support level.
Sources close to some of Italy's main parties said Italy may hold repeat elections as early as July after the man asked to be prime minister failed to secure support from major political parties - even for a stop-gap government.
Italy's political crisis, and the threat to the euro it could represent, triggered a rush to safe havens such as U.S. Treasury debt and the Japanese yen.
"The Italian political problems triggered global investors' risk-off stance. Exporters and financials have been hard hit and they will likely remain vulnerable," said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.
Insurers and banks, which have invested in higher-yielding foreign bonds because of Japan's low yield environment, stumbled to lose 2.4 percent and 2.3 percent, respectively.
Analysts said that there might be further selling in the financial sector because there was speculation that a spike in the yen could trigger further monetary easing by the Bank Of Japan.
The BOJ adopted negative interest rates two years ago in a move that has been hugely unpopular among banks.
"We don't know if the BOJ would deepen negative interest rates to thwart any sharp spikes in the yen, but at least the bank will not abandon negative rates as long as the strong yen keeps threatening the economy," said Hiroyuki Fukunaga, chief executive of Investrust.
Sompo Holdings shed 2.6 percent, Dai-ichi Life Holdings declined 2.8 percent. Mitsubishi UFJ Financial Group dropped 3.4 percent and regional bank Hiroshima Bank declined 2.9 percent and Hachijuni Bank tumbled 3.0 percent.
U.S. benchmark 10-year Treasury yields on Tuesday posted their largest one-day drop in nearly two years as prices rose on safe-haven demand.
Exporters were under pressure as the dollar slipped 0.3 percent to 108.38 yen. Companies with high exposure to the euro zone underperformed, with Mazda Motor Corp falling 2.1 percent, Makita Corp down 3.8 percent and Nikon Corp shedding 2.0 percent.
Traders said they expected the Bank of Japan to buy exchange-traded funds to support the market amid the morning weakness. The BOJ bought ETFs for five straight sessions up until Tuesday as part of its wider policy of supporting asset prices in the economy.
The broader Topix dropped 1.5 percent to 1,736.13.
Editing by Sam Holmes and Eric Meijer