* Strong yen drags down exporters, index heavyweights
* Fast Retailing outperforms, sources say it's interested in J.Crew
* Nikkei likely be supported at 14,000 in midterm - trader
TOKYO, March 3 (Reuters) - Japan's Nikkei average slid more than 2 percent to a 1-1/2-week low on Monday as escalating tensions in Ukraine sparked risk aversion and a stronger yen roughed up exporters like Toyota Motor Corp and Canon Inc. The Nikkei was down 2.4 percent at 14,478.87 in midmorning trade, its lowest since Feb. 20. The index extended losses into a fourth day. Ukraine mobilised for war on Sunday and Washington threatened to isolate Russia economically, after President Vladimir Putin declared he had the right to invade his neighbour, in the biggest confrontation between Russia and the West since the Cold War. "In the midterm, geopolitical tension in Ukraine should weigh on people's minds," said a senior trader at a foreign brokerage. "Going forward, 14,000 will be a relatively firm bottom-line for the Nikkei, and even if it falls below that, it's going to be very short-term." In the long term, when worries about political tensions in Ukraine ease, the Japanese market may stay flat until there are more clues about companies' forecasts for the next fiscal year as well as the impact of the April sales tax increase and how it affects the economy, he said. "People have been complacent regarding Japan because of uncertainty of the timing of potential further monetary easing," he said. Fast Retailing Co outperformed, rising 0.7 percent earlier, after sources said the operator of Uniqlo clothing stores is exploring a deal for U.S. apparel chain J.Crew Group Inc. It last traded 0.5 percent lower. Exporters were weaker on the back of a stronger yen, with Toyota Motor Corp falling 2.5 percent, Canon Inc shedding 2.3 percent and Sony Corp tumbling 3 percent. Index heavyweight stocks also weakened, with SoftBank Corp falling 3.3 percent and KDDI Corp dropping 2.6 percent. The dollar fell as low as 101.30 yen in early trade, its weakest since Feb. 6, and last traded at 101.57 yen, about 0.2 percent below levels seen late last week. The Topix dropped 2.5 percent to 1,182.01, with 32 of its 33 subindexes in negative territory. The JPX-Nikkei Index 400, an index launched this year comprising firms with high return on equity and strong corporate governance, dropped 2.4 percent to 10,707.46.