* Nikkei extends losses, yen's gains press exporters
* Resource shares battered as commodities extend losses
* Nikkei drops below 5-day moving average
TOKYO, June 16 (Reuters) - Japan's Nikkei stock average extended losses to 2.5 percent on Tuesday and looked set for its worst day in at least a month, with resource shares such as Mitsubishi Corp battered by falling commodity prices.
Honda Motor Corp and other exporters extended declines on growing investor caution about the economy as the yen gained against the dollar, with additional downward pressure from losses in Asian stocks.
Market analysts said that profit-taking had picked up steam and that the day's dip could turn out to be more than just a simple adjustment following recent sharp gains.
"The atmosphere is not particularly good, and there's a lot more pressure from outside factors, such as Asian share markets and the yen's advance," said Hiroaki Osakabe, a fund manager at Chibagin Asset Management.
The benchmark Nikkei has fallen below an uptrend line from the March 10 bear market low as well as its five-day moving average. Should it keep falling, its next target could be a bit below 9,600, which is where the 25-day moving average currently comes in.
"Also, if we go by previous patterns, the Nikkei has tended to hit a ceiling in June from rises during the several previous months before heading downwards, and this may be what's happening now," Osakabe added.
The dollar was fetching 96.53 yen, down 1.3 percent, while the MSCI index of Asia-Pacific stocks outside Japan fell 2.1 percent.
The benchmark Nikkei had shed 241.99 points to 9,797.68 by midafternoon after earlier falling as low as 9,760.44, a loss of 2.8 percent, and appeared set for its worst day in percentage terms since early May.
The broader Topix lost 3.1 percent to 917.54.
The Bank of Japan upgraded its economic assessment on Tuesday, but no impact was seen, with analysts saying the upgrade had already been factored in.
Tokyo shares tracked the previous day's decline in U.S. equities, which marked their worst slide in a month on Monday after the New York Fed's Empire State general business conditions index showed the factory sector shrank at a much more severe rate in June than the previous month.
Resource shares were hit especially hard as oil and metals such as copper extended losses marked in a steep slide on Monday.
The Reuters-Jefferies CRB index, a global commodities benchmark, fell 2 percent on Monday on a sell-off sparked by a stronger dollar and investor worries that prices may have run ahead of fundamentals.
Mitsubishi, Japan's largest trading house, lost 5 percent to 1,882 yen and fellow trader Mitsui & Co tumbled 6.6 percent to 1,178 yen. Itochu Corp shed 5.9 percent to 688 yen.
Honda fell 4.1 percent to 2,675 yen, Toyota Motor Corp lost 3.1 percent to 3,710 yen and Canon Inc fell 2.4 percent to 3,240 yen. (Reporting by Elaine Lies; Editing by Chris Gallagher)