* Fanuc contributes most to Nikkei gain
* North Korea missile launch caps gains
* U.S.-China meeting in focus
By Ayai Tomisawa
TOKYO, April 5 (Reuters) - Japan’s Nikkei share average rose on Wednesday morning after the yen rally paused, but financial stocks slipped on falling U.S. yields, while North Korea’s launch of a ballistic missile hurt the overall market sentiment.
Investors kept to the sidelines as focus turned to a crucial meeting between U.S. President Donald Trump and Chinese President Xi Jinping later in the week.
The Nikkei rose 0.3 percent to 18,873.34 in mid-morning trade, after falling to a 10-week low the previous day.
“Investors are on the sidelines as they are cautious ahead of the U.S.-China meeting, Trump’s economic policies and U.S. jobs data,” said Takuya Takahashi, a strategist at Daiwa Securities.
“It may take a while for the Nikkei to trade above the 19,000-mark again and stay above that line.”
While gains were limited, index-heavyweight Fanuc Corp soared 3.2 percent, adding 28 points to the benchmark index.
North Korea fired a ballistic missile on Wednesday from its east coast into the sea off the Peninsula, South Korea’s military said, ahead of a summit between U.S. and Chinese leaders who are set to discuss Pyongyang’s arms programme.
Market participants said that overall impact from North Korea’s missile launch is limited to the market although it has made investors averse to risk.
Automakers continued to slip as dismal March U.S. auto sales dragged on sentiment. Toyota Motor Corp dropped 1.2 percent and Honda Motor Co shed 1.9 percent.
Banks and insurers, which seek higher yielding products, underperformed after benchmark U.S. Treasury yields touched their lowest in more than five weeks.
Mitsubishi UFJ Financial Group declined 1.3 percent, Mizuho Financial Group fell 0.9 percent and Dai-ichi Life Holdings tumbled 1.6 percent.
The broader Topix was flat at 1,504.31 and the JPX-Nikkei Index 400 was flat at 13,468.21. (Reporting by Ayai Tomisawa; Editing by Vyas Mohan)