(Updates with closing prices)

By Kevin Buckland

TOKYO, Jan 10 (Reuters) - Japan's Nikkei share average

sank for a third straight session on Friday, dragged down by a

tumble for Uniqlo store chain operator following a disappointing

earnings report.

Investors were cautious ahead of a closely watched U.S.

monthly payrolls report later in the day, which could provide

crucial clues on the Federal Reserve's policy path. Wall Street

was closed overnight to mark the passing of former President

Jimmy Carter.

The Nikkei index dropped 1.05% to 39,190.40,

accelerating losses into the closing bell, bringing its

three-day decline to 2.23%. For the week, it sagged 1.77%.

Of the Nikkei's 225 components, 183 fell versus 41 that

rose, with one ending flat.

The broader Topix slipped 0.8%.

Providing a bright spot, takeover target Seven & i

Holdings ( SVNDF ), which operates the 7-Eleven convenience store

chain, jumped 4.86% following a Bloomberg report that Apollo

Global Management ( APO ) is considering investing as much as

1.5 trillion yen ($9.47 billion) in a management buyout.

Nvidia supplier Advantest ( ADTTF ) also lent support,

climbing 5.12%.

The bulk of the Nikkei's declines were due to a 6.53% plunge

in Uniqlo-owner Fast Retailing ( FRCOF ), by far the most heavily

weighted stock on the index.

Despite recent weakness, "the Nikkei is likely to stay

robust, supported by a weak yen", said Norihiro Yamaguchi,

senior Japan economist at Oxford Economics.

Domestic earnings season will move into higher gear later

this month and "overall results are likely to stay solid", he

added.

The yen was steady at around 158.39 per U.S. dollar

- not far from 158.55, the weakest level since

mid-July 2024 reached earlier this week.

A cheaper yen inflates the value of overseas revenues for

Japan's many heavyweight exporters.

($1 = 158.39 yen)