* Index slips 10 points to record low for 3rd straight month
* Japan retail investors watching trend of U.S. economy
* 90 pct say budget unchanged or fewer during Golden Week
By Chikafumi Hodo and Mari Terawaki
TOKYO, March 25 (Reuters) - Japanese retail investors' sentiment towards stocks fell to a historic low for the third straight month in March as Tokyo shares slumped to their lowest in a quarter century amid concerns over the global recession.
The Nikkei share average slipped to a 26-year closing low and the broader Topix index slid to a 25-year low during the month as worries over the export-led Japanese economy heightened.
Japanese and global share prices have gained some footing since then, but underlying uncertainty remains about the U.S. economy, dampening individual investors' appetite for stocks.
The investor sentiment index in the survey, taken March 9-12, hit a historic low of minus 74, down 10 points from the previous record low of minus 64 in February. It was minus 62 in January.
The index was the lowest since Reuters began the survey in January 2006.
The index -- calculated by subtracting the percentage of investors who say they are bearish from those who are bullish -- fell by the largest margin since August, when it also fell by 10 points.
"Japan is still relying heavily on exports. Also you cannot expect political action to boost domestic demand now as politics remain unstable," said an office worker in his 30s.
"Consumption can't be expected to pick up in current conditions where companies themselves are seeking ways to survive by cutting jobs and wages," he said.
Sentiment fell widely across sectors, with the pharmaceutical and health care sector posting the biggest drop in March, falling to 18 from the previous survey's 36.
The financial and insurance sector fell 14 points to minus 80.
Respondents said the Nikkei's level depends on progress in the recovery of the U.S. economy.
The Nikkei was at 8,426.72 by midday on Wednesday, up 19.4 percent from a 26-year closing low of 7,054.98 marked on March 10.
Global share prices rallied earlier in the week after the U.S. government unveiled details of its plans to purge U.S. banks of "toxic" assets.
The U.S. Treasury said it would start with $75-100 billion to create public-private investment funds that could be leveraged up to $500 billion or even $1 trillion to buy distressedail to news.feedback.asia@thomsonreuters.com))