TOKYO, May 1 (Reuters) - Japan's Nikkei share average fell 1 percent in early trading on Tuesday, with exporters pressured by a strong yen and risk appetite dampened ahead of elections and a central bank meeting in Europe later this week. The Nikkei dipped to 9,425.5 and the broader Topix also fell 1 percent to 796.7. The yen hit a two-month high against against the dollar, slipping to 79.86, and looked unlikely to break the 80 yen boundary again during a session with little to pique risk appetite. "The stronger yen is driving the Nikkei down this morning, although there's little reason for aggressive selling," said Hideyuki Ishiguro, assistant manager for investment strategy at Okasan Securities. "Investors might also begin to pick up some good deals as there's a lot of attractively priced stocks with the Topix below 800," he added. Europe-dependent exporters such as Toyota Corp, Honda Motor Co Ltd were dealt a punch by the rallying yen, both falling 2.2 percent and weighing on the index as they were the top two most-traded shares on the main board. Market participants said investors were unlikely to make major adjustments to their positions with most Asian markets closed on Tuesday and two more national holidays due on Thursday and Friday in Tokyo. Stronger demand was reported in China, with the official purchasing managers' index (PMI) rising to 53.3 in April, its highest in more than a year, but had little impact as the data failed to meet market expectations of 53.6.. Spain reported its economy contracted in the first quarter, officially putting it in recession as severe government spending cuts to reduce the deficit and a troubled banking sector hamper a return to growth. Standard and Poor's also cut the credit ratings of 11 Spanish banks. "Although the news from Spain is likely to drag on the markets, the attention will really be turning to Europe for the French and Greek elections this weekend and the ECB meeting on Thursday," said Masayuki Doshida, senior market analyst at Rakuten Securities. France will vote in the second and final round of presidential elections on May 6 after Socialist candidate Francois Hollande, who promised to renegotiate a European budget pact, won the first round last month. Greece will vote to replace a cross-party coalition government on the same day. Mixed results from Japan's earning season prodded some investors into action, with Sharp Corp down 7.4 percent after a record annual loss amid dwindling demand for its LCD panels and TV sets. The company also forecast a loss of 30 billion yen for the current year. Yamada Denki Co Ltd also sagged 8.7 percent to a three-month low after the home electronics retailer cut its earnings forecast, citing falling prices for its products and the end of a government subsidy for eco-friendly products. The yen initially weakened on Friday after the Bank of Japan increased asset purchases by 10 trillion yen and expanded buying of exchange-traded funds and real-estate linked funds, but the effect was short-lived given weak data from the U.S. and Europe. The Nikkei lost 5.6 percent last month, its worst April performance in 7 years, following a rally of over 19 percent in the first quarter.