June 25, 2018 / 6:30 AM / 23 days ago

Nikkei drops as yen firms; weak U.S. futures sour mood

* Sharp stumbles after says to issue new shares

* U.S. futures fall on reports Trump plans to bar China cos from investing in U.S. tech firms

* Yen strengthens against dollar

By Ayai Tomisawa

TOKYO, June 25 (Reuters) - Japan's Nikkei share average dropped on Monday as sellers targeted large caps including Fast Retailing and SoftBank as well as defensive stocks, while the mining sector outperformed after oil prices jumped on Friday.

Sharp Corp stumbled 5.1 percent after the company said it will issue 78.4 million shares via a public offering.

The Nikkei fell 0.8 percent to 22,338.15, extending the weekly drop of 1.6 percent in the past week. The dollar dropped 0.5 percent to 109.46 yen in Asian trade.

"The stronger yen is hurting sentiment, but what investors are selling primarily are the defensive names today, so the impact to exporter shares seems to be limited for now," said Hikaru Sato, a senior technical analyst at Daiwa Securities.

All the same, investors remain cautious due to the potential fallout Japan's export-reliant economy might suffer from global trade tensions, he said.

The S&P500 mini futures fell more than 0.5 percent in Asian trade after the Wall Street Journal reported that U.S. President Donald Trump plans to bar many Chinese companies from investing in U.S. technology firms.

Fast Retailing shed 1.0 percent and SoftBank declined 2.4 percent, contributing a combined 40.6 negative points to the Nikkei.

Defensive railroad stocks languished, with East Japan Railway dropping 2.9 percent and West Japan Railway shedding 1.4 percent.

Mining stocks outperformed, with Inpex Corp surging 1.8 percent after oil prices on Friday jumped as the Organization of the Petroleum Exporting Countries agreed on a modest increase in oil production from next month.

In Asian trade, oil prices pulled back after factoring in the slight output rise.

The broader Topix dropped 1.0 percent to 1,728.27. (Editing by Simon Cameron-Moore)

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