* Financial stocks underperform
* Risks include North Korea provocation - analyst
* Tepco surges after receiving initial safety approval from NRA
TOKYO, Oct 5 (Reuters) - Japan's Nikkei share average was nearly flat on Thursday morning after hitting fresh two-year highs in the previous session, while investors await major economic data such as U.S. jobs report due later this week.
The Nikkei was flat at 20,624.61 in midmorning trade after opening a tad higher. On Wednesday, the index rose to 20,689.08, its highest level since August 2015.
"The market is focused on various upcoming events and there are risks here and there so investors are playing it safe after the market staged a rally recently," said Hiroyuki Fukunaga, chief executive of Investrust. "There is also a risk of provocation from North Korea ahead of Oct. 10."
Last Friday, Japanese Defense Minister Itsunori Onodera expressed concerns about more possible provocation from North Korea on Oct. 10, when Japan commences its lower house election campaigns, a date that coincides with one of the North's main anniversaries.
The day's losers included financial stocks, with Dai-ichi Life Holdings falling 1.8 percent and Mitsubishi UFJ Financial Group.
Tech shares and electric parts makers also languished, with Advantest Corp dropping 1.0 percent and Murata Manufacturing Co shedding 1.0 percent, while TDK Corp declining 0.7 percent.
Bucking the weakness, Aeon Co surged 1.6 percent after Japan's largest retailer by sales said it plans further price cuts, as restructuring at its struggling general merchandising stores helped drive first half profits to an 11-year high.
Tokyo Electric Power (Tepco) soared 2.2 percent after the company received an initial safety approval from Japan's Nuclear Regulation Authority (NRA) to restart two reactors at the world's biggest nuclear power plant.
The JPX-Nikkei Index 400 shed 0.1 percent to 1,683.16.
(Editing by Sam Holmes)