* Market cautious as BOJ has track record of surprises - analysts
* Sharp drops on report Foxconn holds off on signing acquisition
* Fed meeting also keeps market cautious - analysts
By Ayai Tomisawa
TOKYO, March 15 (Reuters) - Japan’s Nikkei share average eased in choppy trade on Tuesday but most investors stayed on the sidelines awaiting the outcome of the Bank Of Japan’s two-day policy meeting.
The Nikkei fell 0.3 percent to 17,186.23 points after flirting with positive territory briefly. The benchmark index soared 1.7 percent on Monday.
Most market players expect that the BOJ will not make drastic moves on Tuesday, after its decision in late January to move to negative interest rates stunned global markets.
But investors were still wary that the central bank could spring another surprise. A decision is expected later in the morning.
“The BOJ has a track record of surprising the market so we are cautious,” said Hikaru Sato, a senior technical analyst at Daiwa Securities.
Investors were also awaiting the outcome of the U.S. Federal Reserve’s policy meeting on Wednesday. The Fed is not expected to raise interest rates, but investors will be on the lookout for clues about future hikes.
“The Fed’s move could move the dollar-yen levels and affect Japanese equities so we are careful about possible volatility this week, too,” Daiwa’s Sato said.
Exporters slid, with Toyota Motor Corp falling 0.4 percent and Nissan Motor Co shedding 0.9 percent.
Oil shares were weaker after it oil prices fell about 3 percent on Monday before it rebounded slightly during Asian trade on Tuesday morning.
Inpex Corp fell 1.0 percent and Japan Petroleum Exploration Co tumbled 3.0 percent.
Sharp Corp underperformed the market, falling 1.3 percent after the Nikkei business daily said Foxconn is holding off on signing a Sharp acquisition deal as the Taiwanese company negotiates with main lenders for additional support.
The broader Topix dropped 0.3 percent and the JPX-Nikkei Index 400 declined 0.4 percent. (Editing by Kim Coghill)