Japan's Nikkei gains as yen retreats, tech shares tumble

* Retreat in yen helps to boost exporters
* Defensive shares favoured
* Tech shares slump in step with Apple's fall on Monday
* Nikkei volatility index hits 1-1/2-year low

By Hideyuki Sano
TOKYO, July 9 (Reuters) - Japan's Nikkei share average
gained on Tuesday morning as a retreat in the yen helped to lift
some exporters while Apple suppliers and other technology firms
dropped, in step with Apple.
The Nikkei share average .N225 rose 0.3% to 21,598 while
the broader Topix .TOPX rose 0.1% to 1,579.61.
The yen slipped to 108.85 yen per dollar JPY= from around
108.30 at the local stock market close on Monday, prompting
buying in exporter shares such as Honda Motor 7267.T , which
rose 0.4%.
Gains were also led by defensive shares, such as food
companies .IFOOD.T and retailers .IRETL.T , as investors
continued to favour sectors seen as least susceptible to global
risks.
NH Foods 2282.T rose 3.1% while Familymart Uny 8028.T
gained 4.0%.
Telecom firms also did well, with KDDI 9433.T rising 2.0%
and Softbank Corp 9434.T 0.6%.
On the other hand, electronic part makers and other
semi-conductor-related firms bucked the trend, after Apple Inc
AAPL.O led U.S. technology shares lower on Monday after a
brokerage downgrade.
Apple suppliers followed in its footsteps, with Murata
Manufacturing 6981.T falling 1.5% and Taiyo Yuden 6976.T
down 2.4% and TDK Corp 6762.T off 0.9%.
Shin-etsu Chemical 4063.T fell 1.6% while Keyence 6861.T
shed 0.7%.
The Nikkei has been stuck in a narrow range between 21,500
and 21,800 so far this month as investors seek more clarity on
the Fed's policy as well as the global economic outlook.
"There are some questions over whether the Fed can really
cut rates this month after such a strong reading on payrolls
data," said Hiroshi Masushima, market analyst at Monex
Securities.
Masushima said the Nikkei was unlikely to move much until
next month when investors have a clearer idea on the Fed's
policy and Japanese earnings outlook.
In fact, expectations of a range-bound market are wide
spread.
The Nikkei volatility index .JNIV , a measure of investors'
volatility expectations based on option pricing, fell to a
1-1/2-year low.