* Weak U.S. home sales hurts optimism about economy -analyst
* Hedge funds' unwinding of risk assets weighs -analyst
TOKYO, Oct 29 (Reuters) - The Nikkei average slid more than 2 percent on Thursday below the 10,000 mark for the first time in three weeks, as a stronger yen hurt shares of exporters and after weak new U.S. home sales data sparked a broad sell-off on Wall Street.
But Japan Airlines jumped after Kyodo news agency said Japan's Transport Minister Seiji Maehara will hold a news conference on Thursday evening about the restructuring of the struggling airline.
"Optimism about a recovery in the economy appears to be suffering a correction in the United States. A drop in home sales is a big negative factor for the market," said Takahiko Murai, general manager of equities at Nozomi Securities.
"Another factor is the unwinding of positions by hedge funds, eyeing their earnings season... They seem to be unwinding long positions in risk assets such as commodities and stocks."
The benchmark Nikkei fell 1.9 percent or 189.75 points to 9,885.30, after falling as much 2.2 percent to 9,850.12, its lowest level since Oct. 8.
The broader Topix shed 1 percent to 879.85.
The S&P 500 Index slid 2 percent. Sales of newly built single-family homes unexpectedly fell 3.6 percent last month, according to a Commerce Department report. Separately, data from the Mortgage Bankers Association showed demand for mortgages has fallen for the past three weeks.
Among exporters, chip-tester maker Advantest Corp tumbled 6.3 percent to 2,070 yen and electronics components maker TDK Corp lost 3.1 percent to 4,980 yen. Honda Motor Co slipped 1.7 percent to 2,890 yen.
The dollar was trading around 90.50 yen in early Asia trade, retreating from a more than one-month high above 92 yen hit earlier in the week. Investors fret about a stronger yen as it eats in to exporters' profits when they are repatriated.
JAL jumped 5.4 percent to 118 yen. The Nikkei business daily also said Japan's transport minister will likely announce as early as Thursday plans to tap a new state-backed corporate turnaround body to restructure the struggling carrier.
Companies posting weaker-than-expected results were also hit.
Hino Motors sank 7.6 percent to 341 yen after the truck and bus maker on Wednesday said its operating loss for the year ending in March would be 12 billion yen, worse than analysts' forecasts of a 7.3 billion yen loss.
NEC Electronics Corp was untraded and overwhelmed with sell orders after the company on Wednesday reported a far bigger 15.5 billion yen loss in July-September than the same period a year earlier, and cut its annual outlook on weaker sales of its cutting-edge system chips.
Toyota Motor Corp dipped 0.6 percent to 3,580 yen, after the Nikkei business daily reported the automaker is expected to report a narrower operating loss for the April-September period, helped by a recovery in sales and a weaker yen.
Companies reporting later in the day include Nippon Steel Corp, Sharp Corp, NEC and Nintendo Co Ltd. (Reporting by Aiko Hayashi; Editing by Edwina Gibbs)