TOKYO, May 19 (Reuters) - Japan's Nikkei share average

dropped on Monday after Moody's downgrade of the U.S. government

credit rating raised concerns about a potential flight from U.S.

assets, leading to a stronger yen.

As of 0029, the Nikkei index was down 0.6% at 37,521.86,

while the broader Topix slipped 0.3% to 2,732.22.

"The market is cautious about the impact of the Moody's

downgrade of the United States. They are worried this could

drive sell-off of U.S. assets," said Shuutarou Yasuda, a market

analyst at Tokai Tokyo Intelligence Laboratory.

"The timing of the downgrade was bad. It came at a time

domestic stock markets recouped losses from (U.S. President

Donald) Trump's tariff announcement," he said.

Moody's downgraded the U.S. sovereign credit rating on

Friday due to concerns about the nation's growing, $36 trillion

debt pile, in a move that could complicate Trump's efforts to

cut taxes and send ripples through global markets.

"If U.S. dollars are sold, that would push the yen higher,

which is bad for Japanese exporters," said Shoichi Arisawa,

general manager of the investment research department at

IwaiCosmo Securities.

Shares of Fast Retailing ( FRCOF ), the parent company of

Uniqlo, slipped nearly 1% - the biggest drag in the Nikkei

index.

Chip-related Advantest ( ADTTF ) and Tokyo Electron ( TOELF )

lost 1.35% and 0.87%, respectively.