* Apple suppliers fall after its shares ended lower in U.S.

* Recent volatility in forex market causes stock market low vol - trader By Ayai Tomisawa TOKYO, Sept 10 (Reuters) - Japan's Nikkei share average fell on Wednesday morning after U.S. stocks wilted on fears that the Federal Reserve would hike interest rates earlier than expected, while Apple Inc suppliers were weaker after its shares dropped.

The Nikkei dropped 0.4 percent to 15,679.45 in mid-morning trade after rising for the past two days.

Analysts said while the market is prone to profit-taking, a weak yen should limit the declines.

Research from economists at the San Francisco Fed indicated investors may be underestimating when the U.S. central bank is likely to hike rates.

Benchmark U.S. Treasuries yields rose to their highest in over a month, which helped the dollar hit a fresh six-year high just shy of 106.50 yen.

"Macro hedge funds like to trade in the foreign exchange market as it's more liquid than the stock market now," said Kyoya Okazawa, head of global equities at BNP Paribas, adding that stock market trading volume may stay low, given recent volatility in the currency market.

Volume was 1.78 billion shares on Monday and 1.89 billion shares on Tuesday, well below the 90-day moving average of 2.02 billion shares.

Exporters were higher, with both Toyota Motor Corp and Honda Motor Co rising 0.5 percent while Canon Inc advancing 0.7 percent.

Suppliers for Apple underperformed, with Nitto Denko Corp falling 1.3 percent, TDK Corp sliding 1.3 percent, Ibiden Co declining 0.8 percent after Apple shares fell during U.S. trading hours.

"Short-term investors are selling these shares because there was nothing surprising with Apple's release. The news was priced in quickly," said a local fund manager.

Apple shares jumped as much as 4.8 percent after the company unveiled a smartwatch but ended down 0.4 percent. It also released two larger iPhones.

The broader Topix dropped 0.1 percent to 1,298.67, and the JPX-Nikkei Index 400 was flat at 11,785.04.

(Editing by Eric Meijer)