* Market cautiously await China PMI data * Profit-taking from Tuesday's gains still ongoing - traders * Japan's record high trade deficit widely expected - analysts By Ayai Tomisawa TOKYO, Feb 20 (Reuters) - Japan's Nikkei share average fell for a second day following declines on Wall Street as minutes of the U.S. Federal Reserve's latest policy-setting meeting indicated it will keep trimming its stimulus. Market players said many investors are also staying on the sidelines ahead of the release of the preliminary February China Purchasing Managers' Index (PMI) from HSBC/Markit later on Thursday. The Nikkei shed 0.8 percent to 14,643.01 in mid-morning trade, after falling 0.5 percent to 14,766.53 on the previous day. Analysts said some investors have been taking profit following gains on Tuesday. The benchmark ended up 3.1 percent that day, the highest close since Jan. 31, after the Bank Of Japan said it would extend its loan facilities by a year. "People have realized that the market overreacted to the BOJ's announcement," said Masashi Oda, chief investment officer at Sumitomo Mitsui Trust Bank. "Those who bought then are still selling." Japanese exporters were weaker on Thursday despite the dollar's strength as some risk-averse investors trimmed their positions. Honda Motor Co fell 2.4 percent, Canon Inc dropped 1.3 percent, while Panasonic Corp slipped 1.2 percent. The dollar was up 0.1 percent at 102.40 yen, having pulled back from a low of 101.84 the previous day. Banks also lost ground, with Mitsubishi UFJ Financial Group falling 1.1 percent and Mizuho Financial Group down 0.9 percent. The Topix dropped 0.8 percent to 1,209.19, with its 32 of 33 subsectors in negative territory. On Wednesday, minutes from the January meeting of the Federal Reserve's policy-setting committee showed several policymakers wanted to stick to the idea that their asset-purchase program would be trimmed in predictable, $10-billion steps unless there is a big economic surprise this year. Japan logged a record trade deficit in January as a weak yen pushes up the cost of imports and as export demand slowed, the Ministry of Finance (MOF) data showed on Thursday. "Analysts had been expecting that Japan's trade deficit would hit a record since last week as the country needs to import fuel after its nuclear power plants stopped operating," said Masanaga Kono, senior strategist at Amundi Japan. "The impact from the data is limited." The JPX-Nikkei Index 400, an index launched this year comprising firms with high returns on equity and strong corporate governance, dropped 1.1 percent to 10,909.87.