* Nikkei on target for fresh 2-1/2 year closing low
* Worries about possible Greek default fester
* Investors hope for ETF buying by BOJ
By Lisa Twaronite
TOKYO, Sept 12 (Reuters) - The Nikkei skidded more than 2 percent and was on target for a fresh 2-1/2 year closing low on concerns Europe's sovereign debt woes and U.S. stock losses will deepen.
Senior politicians in German Chancellor Angela Merkel's centre-right coalition started talking openly about the possibility of a Greek default, raising concerns among investors already spooked by the surprise resignation of a European Central Bank board member last week.
"It's Europe's turn to be in focus, but fears about the U.S. economy haven't gone away, and until other parts of the world stabilize, we will continue to see investors taking money out of stocks here and not putting it back in," Fumiyuki Nakanishi, strategist at SMBC Friend Securities.
U.S. stock futures also fell, raising fears that U.S. stocks will continue dropping after they tumbled more than 2 percent on Friday on concern that the euro zone will be able to get its debt crisis under control.
S&P 500 E-mini futures <0#ES:> were last down 11.50 points at 1146.50
The benchmark Nikkei declined 2.3 percent to 8,540.54, dropping below last Tuesday's 8,588. That had been its lowest intraday level since March 15 when stocks were sold off after the earthquake and tsunami.
The broader Topix index shed 2.0 percent to 740.28.
On its way to a 2.4 percent weekly loss, the Nikkei closed on Tuesday at its lowest level since 8,493.77 marked on April 28, 2009. It could test that level this week, though traders cited support around 8,500.
Also supporting the Nikkei were hopes that Japan's central bank would buy assets through its liquidity-boosting programme, as it typically has done on days of steep stock losses.
For three days of Nikkei declines starting Sept. 2, the Bank of Japan bought exchange-trade funds worth 66.9 billion yen, and 1.7 billion yen of REITs on Sept 9.
"For the rest of the week, developments in euro zone debt problems and movements in the euro will likely set the direction of the market," said Yutaka Miura, a senior technical analyst at Mizuho Securities.
Investors are also awaiting the U.S. central bank's policy-setting Federal Open Market Committee meeting on Sept. 20-21 to see if it will adopt further accommodative steps to stimulate the U.S. economy, analysts added.
But Mizuho's Miura said that if U.S. economic data such as retail sales data, industrial production figures and the consumer price index were better than expected, hopes for the U.S. central bank to introduce easing measures may weaken.
Shares in Sharp Corp fell 5.0 percent to 585 yen on Monday after an analyst at Mizuho Securities cut his fair value estimate on the stock to 630 yen from 750 yen.
Suzuki Motor Corp slipped 2.2 percent to 1,492 yen,
after Volkswagen
Honda Motor Co dropped 3.9 percent to 2,257 yen after the car maker said it was recalling almost 347,000 Pilot sport utility vehicles worldwide due to a potential problem with their front seat belts.
Volume was thin, with 1.28 billion shares changing hands on the Tokyo Stock Exchange's main board, suggesting that the day's volume will likely be lower than last week's average of 1.82 billion shares.
(Additional reporting by Ayai Tomisawa; Editing by Joseph Radford)