* Investors could be positioning for a possible drop - analyst
* Market watches "black swan index" - analyst
* Toshiba soars as fears of imminent delisting recede
TOKYO, Aug 9 (Reuters) - Japan's Nikkei share average tumbled to 2-1/2-month lows on Wednesday morning on escalating geopolitical tensions with North Korean, which boosted the safe-haven yen and knocked many stocks.
The Nikkei dropped 1.3 percent to 19,738.71, the weakest closing level since May 31, but defence equipment makers attracted buyers, with Ishikawa Seisakusho soaring 5.0 percent, Howa Machinery rising 1.1 percent and Tokyo Keiki advancing 1.4 percent.
North Korea said on Wednesday it is "carefully examining" plans for a missile strike on the U.S. Pacific territory of Guam, just hours after U.S. President Donald Trump told the North that any threat to the United States would be met with "fire and fury".
"Uncertainty over geopolitical tensions on the Korean peninsula hit when market was already sluggish on a seasonal slowdown in activity in the summer," said Mutsumi Kagawa, chief global strategist at Rakuten Securities.
The CBOE Volatility Index, better known as the VIX and the most widely-followed barometer of expected near-term stock market volatility, closed at 10.96, its highest in about a month.
Kagawa also said the market is also keeping an eye on the CBOE SKEW INDEX, or so-called "black swan" index, which measures the likelihood of extreme moves in the S&P 500 based on how traders are pricing the index's options.
"The index is showing a warning sign as it is rising after U.S. shares staged a rally recently," Kagawa said, adding that investors could be positioning for a possible sharp sell-off in the near future.
The option-based indicator, which was mostly between 120-140 in July, rose to 140.05 on Wednesday.
The dollar ws down 0.3 percent to 110.01 yen, following a retreat to 109.740, its weakest since mid-June, which hurt bellwether stocks such as automakers, tech shares and banks.
Thirty of Topix's 33 subsectors were in negative territory.
Toyota Motor Corp dropped 1.6 percent, Honda Motor Co shed 1.2 percent, TDK Corp stumbled 2.0 percent and Advantest Corp slipped 2.6 percent.
Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group slumped 1.1 percent and 1.3 percent, respectively.
Olympus Corp stumbled 7.7 percent after the company's April-June operating profit dropped 4.9 percent on the year to 12.7 billion yen, hurt by weak demand for medical equipment.
Also in the spotlight was Toshiba Corp, which was demoted to the Tokyo Stock Exchange's second section this month, Its shares rose 3.2 percent after sources told Reuters the Japanese conglomerate's auditor was likely to sign off on its annual results.
The broader Topix fell 1.1 percent to 1,617.90 and the JPX-Nikkei Index 400 shed 1.0 percent to 14,375.72. (Reporting by Ayai Tomisawa; Editing by Eric Meijer)