* Volatility spikes to 3-month high on Brexit concerns
* Short-sell ratio stays above 40
* Immediate support level seen at 15,600 - trader
By Ayai Tomisawa
TOKYO, June 15 (Reuters) - Japanese stocks rose in choppy trade on Wednesday morning, snapping a four-day losing streak thanks to short-covering, but the foray into positive territory is expected to be short-lived on worries Britain might vote to leave the European Union.
The Nikkei share average opened lower, but then headed higher to be up 0.8 percent at 15,983.88 in midmorning trade. The index closed at its lowest level since April 12 on the previous day.
Reflecting the underlying bearish sentiment, short-sell ratio has remained above 40 since hitting a record high on Friday when volumes rose with the futures and options settlement on that day.
Exporters bounced on short-covering after being heavily sold recently. Toyota Motor Corp rose 1.1 percent, recovering from more than a two-month low, while Honda Motor Co gained 0.6 percent after falling to the lowest level since December 2012.
Recently battered financials also gained some respite, with Mitsubishi UFJ Financial Group rising 0.8 percent and Mizuho Financial Group advancing 0.6 percent.
Broadly, however, traders don't expect much upside in the near term as they await the outcome of the U.S. Federal Reserve's two-day policy meeting later in the day, while the Bank of Japan's review will conclude on Thursday where no change is expected.
Traders said the focus is on the yen as central banks make their calls amid a challenging global economic environment, with growth still sluggish and risks of Britain voting to exit the EU stoking volatility in financial markets.
"It's going to come down to the yen. We expect the BOJ to do nothing. So if the Fed does nothing, and the BOJ does nothing, there is nothing there for the US dollar to strengthen," said Gavin Parry, managing director at Parry International Trading Ltd.
Brexit concerns have already pushed the Nikkei volatility index up to more than a three-month high of 34.53.
"It's quite a huge thing, I think the hypothetical impact could be that the EU itself has to rethink about itself (if Britain leaves the EU)... Things like that could disrupt the yen," Parry said, adding that investors are looking at 15,600 as an immediate support level for the Nikkei index.
The broader Topix rose 0.8 percent to 1,282.58 and the JPX-Nikkei Index 400 gained 0.9 percent to 11,557.82.
Editing by Shri Navaratnam