* Lower oil prices hit oil shares, lift airline stocks
* U.S. earnings to determine market directions this week - analysts
* China trade data eyed
By Ayai Tomisawa
TOKYO, Oct 13 (Reuters) - Japan’s Nikkei share average fell on Tuesday morning as profit-taking from last week’s gains hit home and oil-related stocks were sold on lower oil prices.
Sharp Corp defied the weakness and surged as much as 10.1 percent after Reuters reported that a Japanese government-backed fund is considering a range of options to help turn around the struggling company - including direct investment.
The Nikkei dropped 1.0 percent to 18,247.25 in mid-morning trade after rising 4 percent last week.
Investors returned to the market after a three-day weekend in Japan due to a national holiday, and didn’t waste their time selling oil-related stocks after oil prices tumbled on Monday. Inpex Corp fell 3.6 percent and Japan Petroleum Exploration Co shed 1.9 percent.
Trading houses were also lower, with Mitsubishi Corp shed 2.5 percent and Mitsui & Co dropped 2.2 percent.
Oil stumbled 5 percent as traders took profits after last week’s surge to an 11-week high, and on a report that OPEC continued to boost crude production despite a persistent glut.
Airline shares, which benefit from lower fuel costs from cheaper oil, outperformed. ANA Holdings rose 2.2 percent and Japan Airlines Co gained 2.6 percent.
Analysts said that while there was a lack of market-moving domestic catalysts, U.S. earnings announcements may set the direction until the end of the month, when many central banks around the world are scheduled to have policy meetings.
“Investors brace for weak earnings, but if U.S. companies give positive surprises, the market may be supported,” said Nobuhiko Kuramochi, a strategist at Mizuho Securities.
He also said that investors were focused on China’s just-published trade data. “China’s imports, which measure domestic demand, are especially closely watched,” Kuramochi said.
The broader Topix dropped 0.6 percent to 1,505.92 and the JPX-Nikkei Index 400 slid 0.7 percent to 13,499.73.
Reporting by Ayai Tomisawa; Editing by Eric Meijer