(Updates prices and adds details, as of 0230 GMT)

By Kevin Buckland

TOKYO, Sept 9 (Reuters) - Japan's Nikkei share average

fell more than 2% on Monday, with technology stocks among the

biggest decliners, tracking heavy losses among Wall Street peers

in the previous session.

The Nikkei was down 2.14% at 35,613.32, as of the

midday break, dropping below the psychologically key mark of

36,000 for the first time since Aug. 13. At one point, the

benchmark plunged as much as 3.14%.

Semiconductor-sector stocks led the list of biggest Nikkei

decliners, with chip-testing equipment maker Lasertec ( LSRCF )

dropping the most after a 7.57% tumble, and followed by

chipmaker Renesas Electronics' ( RNECF ) 6.68% dive.

The broader Topix lost nearly 2%.

Japanese shares were also weighed down by a stronger yen,

which rallied on Friday amid demand for safe havens as equities

tumbled, after monthly U.S. payrolls figures confirmed the jobs

market was losing momentum.

"The results of the employment report, despite not revealing

a sudden worsening of the U.S. economy, left traders feeling

deeply uncertain about the outlook," said Maki Sawada, an

equities strategist at Nomura Securities.

However, Sawada said Nikkei selling may have run its

course, considering the healthy earnings outlook and a 5.8%

tumble for the index already last week.

"Unless the yen strengthens beyond 142, the Nikkei is

more likely to pare losses than deepen them," she said.

The yen last traded at 142.80 per dollar, but

had rallied as far as 141.75 on Friday for the first time in

more than a month.

The overall firmness of the currency weighed on exporters,

particularly automakers. Transport equipment dropped

more than 4% to be the worst performer among the Tokyo Stock

Exchange's 33 industry groupings, all of which were down on the

day.

One bright spot was takeover-target Seven & i Holdings ( SVNDF )

, whose 2.62% rally put it among the Nikkei's best

performers. Canadian rival Alimentation Couche-Tard ( ANCTF )

said on Sunday it was willing to engage in confidential

discussions with the company, after its initial $38.5 billion

buyout offer was rejected.