* Exporters hit as dollar briefly hits 7-wk low below 92 yen
* Disappointing U.S. jobs data stokes economy worries
* Dainippon Sumitomo up after news to bid for U.S. company
By Elaine Lies
TOKYO, Sept 3 (Reuters) - Japan's Nikkei stock average lost 0.6 percent on Thursday as exporters fell on worries about the U.S. economy after dismal jobs data, but Dainippon Sumitomo Pharma rose on news it would bid for a U.S. drug firm.
Dainippon Sumitomo opened up by nearly 8 percent after a source with knowledge of the situation said the firm planned to offer about $2.7 billion to acquire U.S. drugmaker Sepracor.
The Japanese drugmaker later confirmed the deal, saying it had agreed to buy Nasdaq-listed Sepracor for $2.6 billion. Dainippon Sumitomo's shares ended the day 1.2 percent higher at 1,025 yen.
The benchmark Nikkei lost 65.82 points to 10,214.64, while the broader Topix fell 0.7 percent to 942.77.
"We're in a situation now where expectations outpaced reality over the last two months. This is just a natural adjustment, even though the economy is over the worst," said Hiroichi Nishi, general manager at the equity division of Nikko Cordial Securities.
Trade fell off, with 1.75 billion shares changing hands on the Tokyo exchange's first section compared with last week's daily average of 1.92 billion shares.
The dollar briefly dropped below 92.00 yen for the first time since mid-July, pressuring exporters. The dollar later recovered slightly and was 0.2 percent higher on the day at 92.36 yen.
A U.S. labour market report showing more private-sector job losses in August than forecast made investors nervous ahead of Friday's highly anticipated monthly jobs data from the U.S. Labor Department, sending Wall Street shares lower.
In addition to the yen's gains against the dollar, market players may be bracing for the possibility that a recovery in leading economic indicators such as the U.S. Institute for Supply Management's manufacturing index could start to lose steam, said Hideyuki Ishiguro, a supervisor at Okasan Securities' investment strategy department.
"The trajectory of leading indicators may start to flatten, and I think many people are worried about that," he said.
The Nikkei could fall towards 10,000 if the dollar were to fall below its July trough of 91.73 yen, Ishiguro said, but added that the Nikkei may start heading higher once companies start announcing their corporate earnings in October.
"Earnings will probably show significant improvement and people will have little choice but to focus on that," he said, adding that the Nikkei may rise above 11,000 and possibly 12,000.
Exporters slid on the yen's strength. Investors fret about a stronger yen as it eats into exporter profits when repatriated.
"The pace of the yen's rise appears to be picking up," said Masayoshi Okamoto, head of dealing at Jujiya Securities.
Honda Motor Co lost 2.4 percent to 2,840 yen, Toyota Motor Corp slipped 1.8 percent to 3,850 yen and Canon Inc edged down 1.4 percent to 3,450 yen.
Ishiguro at Okasan Securities said automakers were one sector that seem particularly likely to show an improvement in earnings, although there are some concerns about the impact from an end to the U.S. "Cash for Clunkers" programme.
Thomson Reuters Proprietary Research shows that consumer discretionary and technology sectors have seen the biggest upward revisions to 12-month forward eanings in the past month, and financials, consumer discretionary and the information technology sector are expected to post the highest earnings growth rates in the next 12 months.
Among the consumer discretionary sector, Toyota Motor, Nissan Motor, and Sony Corp are the biggest contributors to dollar-level earnings growth, according to Thomson Reuters Proprietary Research. (Additional reporting by Masayuki Kitano)