* Toshiba down 7 pct: weak Apple earnings, production cut
* Panasonic loses 5 pct, hits 32-year low
* Fears that U.S. stimulus could hurt Japanese stocks
* Defensives, pharmaceuticals put in modest gains
By Sophie Knight
TOKYO, July 25 (Reuters) - Japan's Nikkei share average slid closer to its year-to-date low on Wednesday morning after disappointing U.S. earnings reflected weakening demand in Europe, while hints of more stimulus from the U.S. Fed failed to soothe fears of a global slowdown.
Panasonic Corp slammed into a 32-year low as tech firms suffered deep losses, with Toshiba Corp skidding 7.3 percent on disappointing Apple results a day after the Japanese firm announced plans to cut memory chip production due to oversupply.
The Nikkei lost 1 percent to 8,402.92 before the midday break, striking a fresh seven-week low and nudging closer to its June 4 low of 8,295.63. The broader Topix also lost 1 percent to 710.60.
"There's really nothing to support the market at the moment and it looks l ike it w ill s ink right through June's lows without any trouble," said Hiroyuki Mutsuro, head of execution support at Mizuho Securities. "Demand has really cooled in Europe and even firms that have done well on domestic consumption are going to find it hard to maintain their share prices."
Apple's suppliers came under pressure after sales of the technology bellwether's iPhone came in well under market expectations, even taking into account consumers holding out for the iPhone 5.
Murata Manufacturing Co Ltd, Foster Electric Co Ltd, Ibiden Co Ltd, Seiko Epson Corp, Taiyo Yuden Co Ltd were down between 2.5 and 5.7 percent.
A defiantly strong yen against the euro, which held at 94.33 yen at the midday break, continued to weigh on exporters. Canon Inc, a camera maker with high exposure to Europe due to report earnings later on Wednesday, lost 1.7 percent to hit a fresh 3-year low.
Euro zone concerns were exacerbated by rating agency Moody's decision to change its outlook for Germany, the Netherlands and Luxembourg to negative from stable as the fallout from Europe's weaker southern nations cast a shadow on the region's most robust economies.
"It's a message that if you share a monetary union with broken economies like Spain's and Italy's then you will be dragged down too," said Makoto Kikuchi, CEO of Myojo Asset Management. "The uncertainty about when and how Germany will confront the decision of whether to leave the euro is breeding a risk-off atmosphere right now."
DEFENSIVE STOCKS UP
Investors sought refuge in defensives, with the Topix's pharmaceutical subindex gaining 1 percent after Astellas Pharma Inc was boosted 2.9 percent by one of its prostate cancer drugs being granted priority review status.
Softbank Corp jumped 3.9 percent as the heaviest traded stock on the main board after Bank of America Merrill Lynch upgraded its rating on the mobile operator to 'buy' from 'neutral' saying it was the fastest growing among wireless companies and its capex would decline the most in the next two years.
Softbank has been one of the standout performers on the Nikkei in the past six weeks, dipping only 0.4 percent so far in July against the Nikkei's loss of 6.7 percent, after soaring 20.5 percent in June.
However, hopes that domestically oriented firms such as Softbank might lend sufficient support to the Nikkei for a recovery have petered out as the euro zone's debt crisis sends investors scrambling towards the "safe haven" of the yen, toppling exporters' share prices.
Market players are now downbeat about Japan's own earning season, which kicks off in earnest later on Wednesday, with Canon, Hitachi Construction Machinery, KDDI and Nintendo among those reporting after the bell.
"I think that although individual stocks will be affected by earnings it's unlikely to lend any support to the wider market. Things have become quite tough," said Kenichi Hirano, operating officer of Tachibana Securities.
An increasing number of market analysts see the Nikkei slipping until it hits support around 8,100 or even 8,000. It is down 3 percent on the week so far, after fears of a Spanish bailout were sparked by heavily indebted region Valencia asking Madrid for aid last Friday.
After being struck by fears that Spain might need a full blown bailout, U.S. equities were given a last-minute leg-up on Tuesday after the Wall Street Journal said Federal Reserve officials were moving closer to steps to spur activity and hiring.
However, the news was little comfort for investors in the Japanese market.
"The problem is that if they were to introduce QE3 (a third round of quantitative easing) that would weaken the dollar, thereby strengthening the yen, which is a bad thing for Japanese stocks," said Kikuchi of Myojo Asset Management.
(Editing by Sanjeev Miglani)