* Other utilities hit by Chubu news
* Investors await earnings from Toyota, others this week
By Chikafumi Hodo and Ayai Tomisawa
TOKYO, May 9 (Reuters) - Tokyo stocks fell for a second straight session on Monday, dragged down by a plunge in Chubu Electric after Prime Minister Naoto Kan called for the closure of its nuclear plant due to worries that a large earthquake could trigger another nuclear crisis.
Kan's surprise announcement late on Friday triggered selling of other utility shares and weighed on overall market sentiment as investors worried that further plant shutdowns would exacerbate power shortages that have already disrupted operations at manufacturers since the earthquake in March.
"The news of the Hamaoka nuclear plant clearly was the main factor weighing on Japanese shares today. The market took the news as a big surprise," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments.
"Wariness over nuclear plants has increased as well and investors are looking at this as a risk for Kan's government," Ogawa said.
The benchmark Nikkei average closed down 0.7 percent, or 64.82 points, at 9,794.38. The broader Topix lost 0.4 percent to 853.21.
Japan on Monday lagged other Asian markets, such as Shanghai and Hong Kong, and failed to benefit from a robust U.S. April payrolls report on Friday that unexpectedly showed an increase of 244,000 jobs, the most in 11 months. [ID:nOAT004799]
Chubu Electric, Japan's third-biggest power company, is expected to decide later on Monday to shut its Hamaoka nuclear station, about 200 km (120 miles) southwest of Tokyo, heeding Kan's legally non-binding request to close the plant.
The move signals a potential shift in energy policy after the March earthquake and tsunami crippled Tokyo Electric's Fukushima Daiichi plant in northeastern Japan, causing the worst nuclear crisis in a quarter century.[ID:nL3E7G90WG]
Chubu Electric ended down 10.3 percent at 1,584 yen after plunging as much as 14 percent to an 11-year intraday low of 1,521 yen at one point in the morning.
INVESTOR NERVES
The electric power and gas subindex fell 2.3 percent, the worst-performing sector.
"Foreigners are especially nervous that this could spread to other power companies," said Hideyuki Ishiguro, a supervisor at Okasan Securities.
"Uncertainty about power companies is negative for the market as an actual closure of a nuclear plant would mean higher utility fees and costs for consumers and manufacturers."
Investors in general were hesitant about taking large positions in risk assets as the market wanted to see more U.S. economic data to determine the outlook for the U.S. and global economies, traders said.
The market was also nervous after Wall Street shares fell from their highs due to wariness over Greece's debt problems.
"The U.S. jobs data was positive, but the market is still unconvinced, which is limiting gains in share prices in general," Okasan's Ishiguro said.
Volume fell to the lowest level since April 26, with 1.7 billion shares changing hands on the Tokyo stock exchange's main board, down from than Friday's 1.91 billion shares.
The ongoing strength of the yen also weighed on Japanese shares, traders said.
"It may be difficult for the Nikkei to trade above the 10,000 line soon as that's the pre-earthquake level, and there isn't much in the way of good news to lift stocks to that level," said Yutaka Miura, a senior technical analyst at Mizuho Securities.
Miura added that investors are still concerned about the Japanese currency's strength after the dollar dipped below 80 yen last week.
Investors also refrained from trading actively as many companies, including Toyota Motor , are due to announce results this week.
After the bell, Toshiba Corp , Japan's biggest chipmaker, said it expected its annual operating profit to rise by 25 percent, roughly in line with market expectations, but that outlook could be in jeopardy if potential power outages threaten its mainstay flash memory chips. [ID:nL3E7G90R0] (Editing by Chris Gallagher)