December 20, 2016 / 2:40 AM / 2 years ago

Nikkei flat ahead of BOJ policy outcome; weak yen trend pauses

* Nikkei traverses negative and positive territory

* Toshiba tumbles as bourse keeps stock on watchlist

By Ayai Tomisawa

TOKYO, Dec 20 (Reuters) - Japan’s Nikkei share average was flat in choppy trade on Tuesday morning as the market awaited the Bank Of Japan’s policy decision and the safe-haven yen paused its recent weak trend.

The Nikkei was flat at 19,388.28 in midmorning trade after traversing positive and negative territory.

The central bank’s two-day policy meeting will end on Tuesday, at which it is expected to stand pat on its 10-year government bond yield target as the weaker yen helps Japan’s economic prospects, a Reuters poll showed on Friday.

Analysts said that the market was focused on BOJ Governor Haruhiko Kuroda’s speech after the meeting.

“We want to know what the BOJ will say about the policy framework it announced in September, and we are also focused on any signs on if and when tightening will come into sight,” said Hiroaki Mino, director at investment information department at Mizuho Securities.

Interest rate hikes are back on the radar at the BOJ, for the first time in a decade, as the U.S. Federal Reserve’s tightening cycle pushes global bond yields higher.

Traders also said that trading volume is expected to be low again, as foreign investors head off on Christmas holidays this week. On Monday, both trading volume and turnover were the lowest since Nov. 8.

Exporters took a hit after the dollar fell to as low as 116.55 yen on Monday after two separate deadly attacks in Turkey and Germany raised concerns about security in Europe.

The Russian ambassador to Turkey was shot and killed as he gave a speech at an Ankara art gallery by an off-duty police officer. And in Berlin, a truck ploughed into a crowded Christmas market, killing nine people.

The dollar fell more than two yen from a 10-1/2-month high of 118.66 touched on Dec 15.

Toyota Motor Corp shed 0.5 percent, Honda Motor Co dropped 0.6 percent and Panasonic Corp fell 1.3 percent.

Toshiba Corp tumbled more than 5 percent after the Tokyo Stock Exchange said on Monday it will keep shares of Toshiba Corp as “securities on alert”,

Domestic-demand sensitive shares outperformed, with the land transport subsector rising 0.8 percent and the real estate subsector gaining 0.4 percent.

East Japan Railway Co added 1.4 percent, West Japan Railway Co rose 1.0 percent and Mitsui Fudosan Co gained 1.0 percent.

The broader Topix fell 0.2 percent to 1,545.95 and the JPX-Nikkei Index 400 dropped 0.2 percent to 13,854.34. (Editing by Jacqueline Wong)

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