TOKYO, March 28 (Reuters) - Japan's Nikkei share average

fell more than 1% on Thursday as a majority of the companies in

the index traded ex-dividend, while investors remained cautious

in anticipation of local authorities' intervention into the

currency market.

The Nikkei was down 1.2% at 40,273.29 by 0202 GMT,

while the broader Topix had slipped 1.36% to 2,761.32.

"The market is cautious about a possible currency

intervention. It is not clear at which level and when the

Japanese government will step in," said Shuji Hosoi, a senior

strategist at Daiwa Securities.

"Foreign investors are eager to buy Japanese stocks but they

want to buy them cheap. So they are monitoring how far the yen

is allowed to fall."

The yen fell to a 34-year low against the dollar

on Wednesday, prompting Japan's three main monetary authorities

to hold an emergency meeting to discuss the weak yen.

In a briefing afterwards, top currency diplomat Masato Kanda

said he "won't rule out any steps to respond to disorderly FX

moves."

The yen was last traded at 151.33 against the dollar.

On Thursday, the Nikkei was also dragged lower by the

ex-dividend stocks, losing about 260 points after many of its

components went ex-dividend, strategists said.

Chip-testing equipment maker Advantest ( ADTTF ) fell 2.01%

to become the biggest drag on the Nikkei, while chip-making

equipment maker Tokyo Electron ( TOELF ) lost 0.63%.

Uniqlo-brand owner Fast Retailing ( FRCOF ) slipped 0.75%.

All but three of the 33 industry sub-indexes on the Tokyo

Stock Exchange fell, with paper makers falling 4.88%

to become the worst performer.

Energy explorers rose 0.93% to become the best

performing sector.

Of the 225 Nikkei components, 35 stocks rose and 190 fell.