* Nikkei falls 4.6 pct for week, biggest weekly drop since March
* Insurance sector slides 2.5 pct after soaring 8.6 pct in Sept
* Nikkei volatility eases after the spike on Thursday
By Ayai Tomisawa
TOKYO, Oct 12 (Reuters) - Japan's Nikkei changed course and ended higher on Friday as investors took heart from gains in Chinese shares on upbeat Chinese export data, triggering buying in manufacturers exposed to China.
The Nikkei share average .N225 gained 0.5 percent to 22,694.66 after falling as much as 1.2 percent early in the day. On Thursday, the index slid 3.9 percent.
For the week, the Nikkei shed 4.6 percent, its biggest weekly drop since March.
China reported on Friday an unexpected acceleration in export growth in September and a record trade surplus with the United States, which could exacerbate an already-heated dispute between Beijing and Washington. U.S. futures during Asian trade also underpinned sentiment. S&P mini futures ESc1 and Dow mini futures 1YMc1 both rose 1 percent.
"Investors were relieved to see a turnaround in Chinese shares and indications that the U.S. market will open higher later in the day," said Tsuyoshi Horota, general manager at SMBC Nikko Securities.
"Investors who were shorting earlier wanted to unwind their positions before the weekend."
The Nikkei Volatility Index .JNIV , a widely followed barometer of expected near-term volatility, eased to 25.42 on Friday after jumping on Thursday from 18.36 to 27.52, a level not seen since March.
The insurance sector .IINSU.T underperformed and was the biggest loser on the board, falling 2.5 percent. Last month, it rose 8.6 percent.
Traders said global investors were seen taking profits, while Thursday's sharp selling in such U.S. insurers as Prudential Financial (LON: PRU ) PRU.N and American International Group AIG.N also dampened the mood in the sector.
Dai-ichi Life Holdings 8750.T dropped 2.7 percent to 2,288 yen. Last week, it reached 2,457.5 yen, its highest since January. Sompo Holdings 8630.T , which hit a record high last month, fell 3.6 percent.
Convenience store operator Lawson Inc 2651.T stumbled 6.2 percent after posting an 11.5 percent drop in operating profit for the March-August on investment costs.
The broader Topix .TOPX was flat at 1,702.45.
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