* Nikkei drops below support at 25-day moving average
* Impact of Nintendo drop limited on overall market -analyst
* Carmakers skid on report of output cut impact
* Volume thin, on track for one of lowest days this year
By Ayai Tomisawa
TOKYO, April 26 (Reuters) - Japan's Nikkei average fell 1 percent on Tuesday, dropping below a key support level as exporters were hit by a stronger yen, though investors traded cautiously ahead of corporate earnings announcements.
Nintendo Co shares fell 4.0 percent to 19,520 yen after the game maker on Monday reported its second straight fall in annual profit, hurt by slowing sales of its Wii console, but analysts said the impact on the broader market should be limited.
"There are more earnings coming up, and the market is also carefully awaiting the outcome of the Federal Reserve meeting this week," said Hiroichi Nishi, general manager at SMBC Nikko Securities.
Federal Reserve Chairman Ben Bernanke will hold the first ever post-meeting news conference by a Fed Chief on Wednesday, and market participants will be monitoring his comments for hints on future policy tightening.
The benchmark Nikkei was down 1.0 percent at 9577.64 at the midday break, while the broader Topix index fell 0.7 percent to 834.79.
Volume was thin, with only 726 million shares changing hands on the Tokyo stock exchange's main board in the morning, putting it on a par with Monday, when the full day's volume came to the lowest amount this year at 1.46 billion shares.
Analysts said support for the Nikkei is now pegged at the psychologically key 9,500 line after the index dropped below previous support at its 25-day moving average of 9,608.
Auto shares fell after the Nikkei business daily said last month's huge production cuts will translate into roughly 1 trillion yen in lost revenues for Toyota Motor and other Japanese automakers, citing its own estimates.
Toyota dropped 1.8 percent to 3,215 yen and Honda Motor shed 1.6 percent to 3,055 yen.
"Carmakers are being hit by the double-whammy of the article and a stronger yen. But such drops may be priced into the market soon as investors will likely focus on their earnings," said Kenichi Hirano, a strategist at Tachibana Securities.
Exporters fell after the dollar dropped to a four-week low against the yen , reducing the yen value of their overseas earnings. Sony Corp lost 1.7 percent to 2,424 yen and Toshiba Corp shed 1.6 percent to 421 yen.
Shionogi & Co fell 5.7 percent to 1,300 yen after the pharmaceutical maker cut its group estimates for the financial year ended March 31, trimming its sales forecast to 282.3 billion yen ($3.4 billion) from 283.0 billion yen and its operating profit forecast to 46.8 billion yen from 54.0 billion yen. [ID:nT25807UDL]
On the other hand, DeNA Co surged 5.7 percent to 2,992 yen after it said on Monday it would tie up with NTT DoCoMo Inc to provide a direct link to its popular social gaming platform "Mobage" through DoCoMo cellphones and smartphones.
DoCoMo, Japan's largest mobile phone operator, rose 1.3 percent to 145,400 yen. (Additional reporting by Chikafumi Hodo; Editing by Hugh Lawson)