* FTSE 100 falls 1.2 percent, hits lowest in a week
* Miners, energy dented by weaker commodity prices
* FOMC, corporate earnings awaited
By Simon Falush
LONDON, Oct 12 (Reuters) - Weaker commodity stocks and banks pulled Britain's top share index lower on Tuesday, as uncertainty over corporate earnings and possible currency intervention turned investors cautious on equities.
By 0801 GMT the FTSE 100 was 70.43 points or 1.2 percent lower at 5,601.97, and touched its lowest in a week after it added 0.3 percent on Monday.
Mining stocks acted as a big drag on the index, weighed by lower metal prices which fell on concerns prices are technically overbought. Xstrata fell 2.1 percent and Lonmin lost 1.6 percent.
A 2 percent fall in Japanese equities set a cautious tone in the UK and elsewhere in Europe, as investors there were nervous about possible currency intervention as the yen rose to fresh 15 year highs against the dollar.
The U.S. Federal Reserve's release of the minutes from its Sept. 21 meeting, due later, is expected to reflect division among officials over whether to launch another round of quantitative easing to support the fragile economic recovery.
"It's a market in which investors are concerned about the macro environment, quantitative easing is looming, and there is the threat of trade issues, certainly between China and the United States," Peter Dixon, UK economist at Commerzbank said.
"All these factors are in the mix and markets are trading accordingly."
Investors were also nervous ahead of the U.S. third-quarter reporting season, with figures due from Intel on Tuesday, JPMorgan Chase on Wednesday, Google on Thursday, and General Electric on Friday.
Energy stocks were lower as crude dipped over 1 percent to a little over $81 per barrel. BP lost 1.2 percent while Royal Dutch Shell fell 1.5 percent.
Shares in Soco International dropped nearly 20 percent, making the British oil explorer the biggest loser on Britain's mid-cap index, after the company sais a closely watched appraisal well in Vietnam failed to flow at commercial rates.
BANKS SOFTER
Banks, whose performance tends to closely mirror moves in risk appetite, were also weaker. Barclays fell 0.8 percent while Lloyds Banking Group fell 1 percent.
After touching a peak since late April last week, the blue-chip index has failed to show much direction.
"Sandwiched between two psychological levels -- 5,600 and 5,700 -- the FTSE appears to be increasing in volatility with range-bound, sideways movement dominating the short-term intraday time frames," Raghee Horner, Autochartist's chief market analyst, said.
Data pointed to tough times ahead for the UK economy. British retail sales growth halved last month, led by a drop in big-ticket items as uncertainty ahead of government spending cuts made consumers nervous, a survey by the British Retail Consortium showed.
House prices in England and Wales suffered their sharpest fall last month since May 2009, a survey from the Royal Institution of Chartered Surveyors indicated.
British economic activity slowed sharply in the third quarter, the British Chambers of Commerce said, reiterating its call for the Bank of England to inject more stimulus to protect the recovery from budget spending cuts.
Investors were also waiting for UK September CPI data, and UK August trade balance figures, both due at 0830 GMT. (Editing by Louise Heavens)