* Automakers drop as U.S. incentive plan to end on Monday
* Exporters slide as yen advances, investors take profits
* Trade cautious ahead of Japan's Aug. 30 election
By Aiko Hayashi
TOKYO, Aug 21 (Reuters) - Japan's Nikkei average slipped 1.4 percent on Friday, hurt by the yen's advance against the dollar, with Toyota Motor and other automakers also skidding on news that the United States will end a car rebate programme soon.
Market players said stocks extended losses in the afternoon due to a stronger yen, which curbs exporters' profits when repatriated, and weakness in the Hang Seng Index as investors nervously watch moves in Chinese stocks for cues.
"Uncertainty about the direction of the Chinese stock market and news of the end of the U.S. auto incentive programme are bringing down the market," said Masaru Hamasaki, a senior strategist at Toyota Asset Management.
"The news of the end of the programme came as a surprise and sparked concerns about a drop in sales as a result. That's negative for auto stocks."
In moderate trade the benchmark Nikkei shed 145.21 points to 10,238.20, after briefly falling as far as 10,142.22, its lowest point since July 30. It gave up 3.4 percent on the week.
The broader Topix slipped 1.2 percent to 947.34.
The Hang Seng Index slipped nearly 2 percent during Tokyo trading time, while the Shanghai Composite Index added 0.9 percent, after having logged a 20 percent dive in the two weeks to Wednesday's close, unnerving investors around the world.
Investors were also cautious ahead of Japan's national election on Aug. 30.
Newspapers including the Nikkei business daily are predicting that the opposition Democratic Party could be headed for a landslide victory, trouncing the conservative party that has ruled for most of the past half-century.
"A landslide victory by the Democrats has started to sound more realistic, and that is leading investors to close positions for now," said Fumiyuki Nakanishi, manager at SMBC Friend Securities.
AUTOMAKERS DRAG
Automakers lost ground after the U.S. government said it will suspend its popular "cash for clunkers" auto rebates on Monday as the programme's $3 billion budget runs dry, a month after it was launched.
The programme has provided a big temporary boost for both the deeply troubled auto industry and the battered U.S. economy.
Toyota Motor Corp, the world's largest carmaker, slid 2.9 percent to 3,980 yen, while Honda Motor Co dropped 4.1 percent to 2,955 yen and Nissan Motor Co lost 5.2 percent to 677 yen.
The dollar fell 0.5 percent to 93.71 yen, which hit exporters.
Canon Inc declined 1.1 percent to 3,500 yen and Sony Corp fell 1.4 percent to 2,445 yen. Kyocera slipped 1 percent to 7,320 yen.
Among stocks that gained, Fujitsu gained 1 percent to 625 yen after it said it sold most of its shares in industrial robot maker Fanuc Ltd for 89 billion yen ($945 million), and it revised its 6-month net earnings forecast to a profit from a loss.
Fanuc slipped 1.7 percent to 7,330 yen.
Ito En, a major drinks maker, surged 7.2 percent to 1,648 yen after Morgan Stanley lifted its rating on the stock to "equal-weight" from "underweight" citing hopes for lower costs and a recovery in the sales volume of its green tea drinks.
Some 2.2 billion shares changed hands on the Tokyo exchange's first section, slightly above last week's daily average of 1.9 billion.
Declining stocks outnumbered advancing ones by more than 3 to 1. (Editing by Michael Watson)