TOKYO, Jan 13 (Reuters) - Japan"s Nikkei share average dropped on Thursday, as a jump in COVID-19 cases spurred a sell-off in retailers and other service providers, with technology stocks also witnessing a slide. The Nikkei (.N225) shed 0.86% to 28,658.22 by the midday break. The broader Topix (.TOPX) fell 0.58%. Japan recorded a surge in new cases on Wednesday, with infections reaching four-month highs in the major metropolitan areas of Tokyo and Osaka as the Omicron variant spreads. Chief Cabinet Secretary Hirokazu Matsuno said the nation "must brace for the rapid spread of infections to continue." read more Cinema operator Toho (9602.T) was the Nikkei"s biggest loser, dropping 4.98%. Retail conglomerate Aeon (8267.T) was a close second, declining 4.77%. Uniqlo store operator Fast Retailing (9983.T) slumped 1.44%. "Investors are starting to think that economic normalization will be delayed, and that"s weighing on sentiment," said a market participant at a domestice securities firm. The tech sector also tumbled, despite starting the trading day in the green. Olympus (7733.T) shed 4.61% and electrical equipment maker YASKAWA lost 4.50%. The biggest chipmakers on the Nikkei though trade mixed, with Tokyo Electron (8035.T) dropping 0.45% and Advantest jumping 1.12%. Overnight, tech stocks led the rally on Wall Street, with the Philadelphia SE Semiconductor Index (.SOX) rising 0.66%. The Topix precision machinery subindex (.IPRCS.T) was the biggest loser, down 2.63% and hitting its lowest level since June. The subindex attempted a rebound on Wednesday, but that left it with little headroom for gains this session, said a market participant at a domestic asset management firm. Subindexes for retailers (.IRETL.T) and services (.ISVCS.T) rounded out the Topix"s bottom three, falling 1.92% and 1.87% respectively. At the other end, iron and steel"s (.ISTEL.T) 3.12% rally made it the best-performing Topix subindex amid strong commodity prices. Pacific Metals (5541.T) posted the Nikkei"s biggest percentage advance, jumping 5.56%, followed by Toho Zinc (5707.T), Sumitomo Metal Mining and Nippon Steel .