The Nikkei index of the Tokyo Stock Exchange lost 37.74 points to 9,019.52 by the lunch break. The Topix index of all first section shares fell 0.49 percent or 3.78 points to 772.87.

"Selling, particularly of auto shares, is accelerating on the back of concerns about a slowdown in the global economy and the firmer yen," Monex market analyst Toshiyuki Kanayama told Dow Jones Newswires.

Japan's recovery could slow if the yen stays near the record high level, hurting exporters, while the US and European economic outlook stays uncertain, economists say.

The yen stood at 76.60 to the dollar, near the record high of 76.25 marked in March.

"The rebound in shares...continues to be limited since the broader global (economic) environment continues to be highly uncertain," said Yoshinori Nagano, a senior strategist at Daiwa Asset Management.

Thursday's stocks fall came after the finance ministry said Japanese exports in July fell 3.3 percent from a year ago to 5.78 trillion yen ($75.4 billion), beating market expectations of a 4.4-percent drop.

A wide range of shares fell in the morning session, particularly exporters.

Toyota Motor lost 1.02 percent to 2,826. Nissan Motor fell 2.12 percent to 694. Honda Motor fell 1.18 percent to 2,522.

Asahi Group Holdings added 2.20 percent to 1,624 after it announced a plan to purchase New Zealand's Independent Liquor for $1.28 billion as it continues to expand overseas operations in search of growth.

In the forex market, the euro firmed to $1.4401 and 110.31 yen in midday Tokyo trade, compared with $1.4406 and 110.45 yen in New York overnight.

The Swiss franc moved to 1.1386 to the euro, from 1.1434, and 0.7906 francs to the dollar, from 0.7909.

Copyright AFP (Agence France-Presse), 2011