(Reuters) - Japan's Nikkei share average slipped more than 1 percent on Friday, backing further away from its 25-day moving average as investors fretted over the euro zone debt crisis and weakness in the single currency.    

For Japan's market participants, the euro rate as it is now reflects a deep-rooted, pessimistic view of Europe's problems, which remain very uncertain, said Ryota Sakagami, chief strategist of equity research at SMBC Nikko Securities.    

The Nikkei fell 1.2 percent to 8,390.35, declining below its 25-day moving average at 8,500, and  marking a 0.8 percent loss for the week.     

The broader Topix dipped 0.9 percent to 729.60 as participants avoided risk ahead of a three-day weekend, with Japanese markets closed on Monday for a national holiday.     

We knew last year that Europe's problems were being pushed back to the beginning of this year and market participants remain worried about Italian and Spanish bond sales next week, said Yutaka Miura, a senior technical analyst at Mizuho Securities. It looks like the Nikkei will be weak for the time being in this environment.    

The benchmark remained rangebound before the closely watched U.S. nonfarm payrolls data due at 1330 GMT, with investors seeking further clarity on the state of the U.S. economy.    

The euro marked a 16-month low against the greenback and was trading at 98.71 yen on trading platform EBS, near
an 11-year low hit on Thursday.    

Shoji Hirakawa, chief strategist at UBS, said the impact of the euro's weakness on Japanese exporters' earnings was relatively small as the region accounts for only 5-10 percent of their total sales and profits, but that it was hurting market sentiment.    

In the case of a weaker euro, the stock market will suffer even if the material impact is small, he said.    

Cyclicals like shippers lost heavily, with Japan's shipping subindex dropping 3.7 percent.     

Continuing its losing streak, Elpida Memory shed 5.4 percent to 331 yen after Deutsche Bank cut its target price
to 400 yen from 500 yen, citing a longer earnings recovery due to protracted market weakness and delays in reducing costs.    
    
DROPPING OUT   

Shares of Olympus Corp seesawed, ending up 2.1 percent and reversing earlier losses after ousted CEO Michael Woodford said he was ending his three-month bid to return to the scandal-hit firm and replace the management.    

There are obviously many investors who think that even without Woodford, the company has such a strong market share (in endoscopes) that it has value as a possible (acquisition target), said Masayoshi Okamoto, head of dealing at Jujiya Securities.   

Also heavily traded was Japan Bridge Corp, gaining 18.8 percent to 380 yen after a report on Thursday that the Metropolitan Expressway Company was planning to spend 1 trillion yen to upgrade its infrastructure.   

The number of shares changing hands on the main board ticked up to 1.54 billion shares from Thursday's 1.26 billion. Declining shares outpaced advancers 1,152 to 354.

Most Southeast Asian stock markets posted modest gains on Monday as investors picked consumer and financial stocks supported by growth at home, with sentiment reviving after signs of improvement in the German and U.S. economies.   

The region recouped early losses in line with markets elsewhere in Asia and as the euro recovered after data showing German exports jumped 2.5 percent in November.

Leading gainers, Philippine shares climbed 1.3 percent to five-month highs but in turnover of just 0.22 times
the 30-day average and Thai stocks edged up 0.8 percent to two-week highs after early weakness as bank shares recovered.   

Malaysia's main index was up 0.5 percent, Vietnam  rose 0.8 percent after four losing sessions of more than 4 percent and Indonesia edged up 0.5 percent. Singapore  bucked the trend, falling 0.9 percent. Traders cited profit-taking after the Singapore bourse racked up gains in the four previous trading days.
      
Nagging concerns over the euro zone debt crisis helped keep risk-averse investors cautious. The weakness of Asian currencies against the U.S. dollar as investors run to the dollar as a safe haven may ultimately eat up profits at Southeast Asian firms.
   
For Indonesia, fundamentally it remains solid. Our main concern is about the rupiah weakness because of the stronger dollar, said Jakarta-based Harry Su, head of research at Bahana Securities.   

Better-than-expected U.S. job data has underpinned hopes that the world's biggest economy is on a recovery path.   

MSCI's broadest index of Asia Pacific shares outside Japan  edged up 0.16 percent at 0933 GMT.   

In Bangkok, banking shares rose 0.98 percent, led by a 1.4 percent rise in the biggest, Bangkok Bank Pcl. The prospect of higher levies on deposits has hurt the profit outlook for banks but traders said the sector appeared oversold.   

Shares seen as beneficiaries of domestic consumption were among gainers in the region, with PT Unilever Indonesia Tbk  up 2.1 percent and Telekom Malaysia Bhd up 1.04 percent.   

In Manila, bank stocks gained amid expectations of lower interest rates, which could help boost domestic consumption and demand for loans, said Manila-based Gregg Llag, an analyst at AB Capital Securities.   

Lower Philippine inflation for December bolstered hopes for a possible rate cut by the Philippine central bank this month, he said.   

Metropolitan Bank and Trust Co surged 4.6 percent and BDP Unibank Inc jumped 4.2 percent.       

(Additional reporting by Viparat Jantraprop and by Singapore bureau; Editing by Alan Raybould.)

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