* Nikkei falls 0.2 pct, but holds above key technical levels
* Investors shun risk as turmoil sparks global econ worries
* Stronger yen weighs on shares of exporters
By Antoni Slodkowski
TOKYO, Feb 23 (Reuters) - Japan's Nikkei slipped further on Wednesday to its lowest in nearly two weeks, after tumbling almost 2 percent the day before as investors pull out from riskier assets, with turmoil in Libya driving crude oil prices to 30-month highs and sparking worry of slower global growth.
But the benchmark index held well above immediate support at its 25-day moving average, now at 10,552, with market participants saying more trading cues were needed from mainland Chinese markets to decide how serious the latest correction may be.
Some blue-chip exporters dropped, with Sony Corp shedding 0.7 percent to 3,015 yen and construction machinery maker Komatsu Ltd slipping 0.9 percent to 2,472 yen, as the yen hovered around two-week highs against the dollar on safe-haven demand amid the Middle East worries.
"Global investors are now trying to decide if the Middle East crisis means a major shift of geopolitical balance of power in the region and the U.S. losing influence there, meaning more instability and possible further oil price rises," said Masayuki Kubota, a senior fund manager at Daiwa SB Investments.
By midmorning, the Nikkei average was down 0.2 percent or 21.70 points at 10,642.10. The broader Topix also dropped 0.2 percent, to 954.60.
By Tuesday, eastern Libya was no longer under the control of Muammar Gaddafi after a revolt spread across the country, soldiers who no longer backed the Libyan leader told a Reuters correspondent. Gaddafi used tanks, helicopters and warplanes to try to quell the growing revolt, witnesses said.
"If surging oil prices stoke inflation to levels that can seriously threaten global economic recovery, the mood in equity markets may turn very bleak, but it's still a bit too early to make this call," said Kubota, adding that this was the reason for the relatively muted moves in the Tokyo market on Wednesday.
The Nikkei is one of the best performing equity markets this year, having gained more than 4 percent in the year to date in heavy volumes and outpacing inflation-mired emerging markets. The Tokyo market has rallied 16.5 percent from November, and many analysts had predicted it was due to advance around 20 percent in 2011.
Despite oil holding near 2-½ year highs, energy and commodities stocks fell as investors snapped up profits. Having outperformed the rally on the Nikkei in 2011, and after gaining over 22 percent in the year to date, Inpex Corp, Japan's largest oil and gas developer, shed 1.5 percent to 581,000 yen.
Toshiba Corp rose 0.6 percent to 517 yen after Mizuho Securities raised its rating on the stock to "outperform" from "neutral", citing a recovery in the LSI business and the NAND flash memory business in a report obtained by Reuters. Mizuho also hiked its target price to 700 yen from 430 yen. (Additional reporting by Ayai Tomisawa; Editing by Chris Gallagher)