Nikkei plunges 9.6 pct, biggest one-day fall since '87

*Nikkei falls 9.6 pct, biggest one-day drop since '87 crash

*Nikkei down 24 pct for week and 46 pct for year

*Growing worry about financial system feeds fears

*Yamato Life bankruptcy filing spooks investors (Adds quotes, details)

By Elaine Lies

TOKYO, Oct 10 (Reuters) - Japan's Nikkei share average plunged 9.6 percent on Friday for its biggest drop since the 1987 stock crash, wiping out $202 billion in market value on growing fears that the financial crisis will spark a global recession.

The Nikkei, which has fallen for seven straight days, lost 24 percent on the week, more than twice what it lost the week of the 1987 crash. It has lost 46 percent this year.

"This is panic. New York, the currencies -- there's nothing left for us to trust," said Takashi Ushio, head of investment strategy at Marusan Securities.

"Investors are scurrying to convert to cash. A lack of confidence is coupling with panic."  Continued...