* Fast Retailing tumbles on bleak f'cast, drags down Nikkei
* Tests support level seen at 25-day moving average
* Support from expectations of FX intervention, Fed easing
* Earnings season eyed, but hopes not high in Japan -analyst
By Aiko Hayashi
TOKYO, Oct 12 (Reuters) - Japan's Nikkei average fell 2 percent on Tuesday, dragged lower by a climb in the yen to fresh 15-year highs against the dollar and a surprisingly weak profit forecast from popular stock Fast Retailing.
The benchmark extended its slide as the yen advanced further in the afternoon, although the risk of another round of intervention seemed to have grown after Japan weathered a flurry of weekend G7 and IMF meetings with hardly any criticism of its recent yen sales.
"Worries about further strength in the yen spurred hedge selling in futures," said Hiroaki Kuramochi, chief equity marketing officer at Tokai Tokyo Securities, adding that markets had yet to see any significant change in comments from Japanese authorities since the dollar fell below 82 yen.
And while earnings hopes appear to have boosted U.S. stocks after Alcoa Inc's third-quarter profit beat Wall Street estimates last week, sentiment in Tokyo is weaker.
"Earnings hopes appear to be supporting U.S. stocks after they kicked off the earnings season with a relatively upbeat note such as Alcoa," said Yumi Nishimura, deputy general manager at Daiwa Securities Capital Markets.
"By contract, expectations aren't really high in terms of earnings reports so far in Japan, although the reporting season won't get into full swing until later this month."
Despite early gains on the back of climbs in global equities after weak U.S. jobs data strengthened the case for more stimulus from the Federal Reserve, the benchmark Nikkei shed 197.24 points to 9,391.64.
The broader Topix dropped 1.9 percent to 823.46
Still, market players said expectations of currency intervention by Japanese authorities and further asset buying by the Federal Reserve to support the U.S. economy will likely mean that the Nikkei would not fall much further.
In Asia trade, dollar/yen hit the day's low of 81.85 yen on the electronic trading platform EBS, and is now trading at 81.94 yen, coming back under pressure as earlier short-covering faded, traders said. It logged a 15-year low of 81.37 on Monday.
Market players see the Nikkei's 25-day moving average as a major technical support level, which now stands at 9,425, while its 26-week moving average at 9,680 is seen as the next resistance.
After that, the Nikkei's next upward targets stand near its recent peaks around 9,700 hit this month and 9,800 hit in July.
Fast Retailing, the operator of the Uniqlo clothing chain, forecast its first annual profit fall in four years on tough competition and higher costs, sending its shares down more than 9 percent.
It lost 9.1 percent to 11,260 yen. (Editing by Edwina Gibbs)