* Banks and insurers lead decline
* Market focus will gradually shift to fundamentals, FOMC-analyst
By Ayai Tomisawa
TOKYO, Nov 17 (Reuters) - Japan's Nikkei share average edged down on Thursday morning tracking weakness in Wall Street, while the central bank's first fixed-rate debt purchasing operation hurt financial stocks.
In mid-morning, the Bank Of Japan launched its first fixed-rate debt purchasing operation to bring down bond yields, momentarily lifting the Nikkei to positive territory as the dollar pared losses against the yen after the operation.
But the benchmark index soon went back to negative territory, and was down 0.1 percent at 17,848.79 by 0224 GMT.
On Wednesday, the Nikkei ended at a 9-1/2-month high.
U.S. stocks, which had been rising on optimism about the Trump administration's economic policies since his victory in the U.S. presidential election, languished overnight.
"In the Japanese market, as stocks have risen too fast, profit-taking is not surprising," said Takuya Takahashi, a strategist at Daiwa Securities.
He added that investors' attention will gradually shift to market fundamentals and the U.S. Federal Reserve's policy meeting in December where it is expected to raise rates.
Financials, beneficiaries of rising U.S. yields and Japanese bond yields, slipped on profit-taking. Their drops widened after BOJ Governor Haruhiko Kuroda said on Thursday he does not have to accept gains in Japanese government bond yields simply because U.S. Treasury yields are rising.
The benchmark 10-year yield, which rose to a nine-month high of 0.035 percent on Wednesday, was down half a basis point at 0.010 percent.
Mitsubishi UFJ Financial Group dropped 2.9 percent, Mizuho Financial Group shed 1.7 percent, Dai-ichi Life Holdings slipped 1.4 percent and MS&AD Insurance fell 1.0 percent.
Exporters were mixed, with Nissan Motor Co falling 1.0 percent, Honda Motor Co rising 0.3 percent and Panasonic Corp shedding 0.2 percent.
The broader Topix was down 0.1 percent to 1,420.58 and the JPX-Nikkei Index 400 shed 0.1 percent to 12,761.78. (Editing by Jacqueline Wong)